"Backcountry" Sold in a Near-Bankruptcy Exit...

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Author: Eoin Comerford, Industry expert...

According to Pulse Ratings Inc., Backcountry (BC) has been sold to CSC Generation, a roll-up of distressed retailers like Sur La Table, One Kings Lane and more. The transaction took place in August but has been kept very quiet. In fact, the first outdoor media to cover the story was the Rock Fight Podcast with Colin True.

Prior to 2019, BC had used its online leadership and gearhead strategy to drive $1B in revenue and private equity owner TSG Consumer Partners was asking for close to 1X revenue from potential acquirers. Fast forward five years and, after selling off valuable European subsidiary Bergfreunde to DECATHLON FRANCE late last year, TSG has ultimately sold off the remaining BC assets for pennies on the dollar and a fraction of its $350M purchase price back in 2015.

So what happened? Ultimately, BC fell victim to many of the same challenges facing the whole outdoor industry, combined with the ecommerce profitability squeeze created by ever-increasing marketing and shipping costs… challenges with which I can certainly sympathize.

But the key issue was that TSG wanted BC to follow the playbook that drove the success of its other big ecommerce investment: REVOLVE, i.e., use fast fashion techniques to build out multiple private brands that sell at high margins. The private brand strategy led to a number of self-inflicted wounds:
1) In 2019, to protect the core Backcountry private brand, BC decided to sue any small outdoor brands and retailers that had “backcountry” in their name. This drew huge consumer backlash and lead to the firing of the CEO.
2) The fast fashion launch of multiple private label brands (Backcountry, Basin & Range, Stoic) drove very wide assortments but poor customer reviews for fit and quality. Ultimately, much of the line had to be liquidated at 60-80% off.
3) To drive sales of the private brands, BC embarked on a physical retail roll-out in expensive, glitzy retail developments like The Grove in Los Angeles or Stanford Shopping Center in Palo Alto, CA. Merchandised like outdoor boutiques, the stores were primarily filled with BC’s own brands with just enough other brands and gear sprinkled in for a little "authenticity".
4) In another effort to drive sales, BC attempted to sell its brands to other retailers, taking out a booth at Outdoor Retailer. I’m not sure if they made any sales but the general industry reaction was not positive.

It will be interesting to see where CSC Generation takes Backcountry. Continue to lean into the private brand and physical retail strategy or go back to the gearhead roots that made BC such a staunch competitor back in the day?

There are a lot of really fine outdoor lovers that work for Backcountry. For their sake, and the sake of the overall industry, I hope that the new ownership can return BC to better, healthier place.