Specialty sports retailer Summit Sports is taking a more year-round approach to outdoor adventure with the acquisition of Austin Canoe and Kayak, with more specialty sports retailers likely to be added this year to Summit Sports LLC.
The umbrella company formed in late January as Summit Sports Inc., No. 616 in the Internet Retailer 2015 Second 500, bought Austin Canoe and Kayak. Several niche sports retailers are under consideration for acquisition in 2016, with a goal of one per year, says Andy Schepper, Summit Sports LLC’s chief operations officer.
Investment firm Digital Fuel Capital LLC, which acquired Summit Sports in March 2015, backed the transaction with Austin Canoe and Kayak. Other investors include Bay Capital Partners, Eagle Private Capital, MB Financial and Pine Street Capital. Terms were not disclosed. Carson Biederman, president of Digital Fuel Capital, says the company is eager to acquire other leaders in specialty sports.
The e-commerce sites and stores for Summit and Austin Kayak focus on opposite seasons, with Summit centered on such winter sports as skiing and snowboarding, and Austin on fishing and warmer weather sports. “You could flip their sales curve onto ours and it would be almost the perfect flat line,” Schepper says.
And the differences don’t end there. As the deal for Austin Kayak was being discussed, the retailers found their e-commerce platforms and back-office systems had nothing in common. “We’re on Demandware; they’re on a home-built platform. We use UPS; they use FedEx. And not one system was similar with third-party providers,” Schepper says. Summit Sports operates six sites: Skis.com (its flagship site), SummitSports.com, Snowboards.com, WaterOutfitters.com, Campgear.com and InlineSkates.com.
Peter Messana, co-owner of Austin Kayak, became CEO of Summit Sports. Summit Sports founder and CEO Steve Kopitz became chairman of the board.
“In just 10 years, we grew ACK from a small mom-and-pop shop with two employees to one of the largest specialty paddlesports retailers in the country,” Messana says. “We are looking forward to the next chapter for ACK, and in particular what it will offer our customers, employees, vendors and partners.”
There’s not a big rush to consolidate systems, but everything is under review, he says. “We both do some things really well, and there’s room for improvement. Where we’ll first grab economies of scale is marketing and from pick, pack and ship.”
Adding Austin Canoe and Kayak gives Summit a second fulfillment center, this one in Texas, which will improve shipping efficiencies, Schepper says. Summit’s Michigan center is about 70,000 square feet, and the one in Texas is about 50,000. “As new orders come in, we’ll be looking at fulfillment for both companies, and what portion we’re shipping to southern states. We’ll be distributing products to both centers,” he says.
Austin Kayak generates about 80% of its revenue from online sales, which were just over $20 million in 2015, Schepper says, making its total sales about $25 million last year. Summit’s web sales account for about 60% of revenue, Schepper says. In 2014, Summit’s web sales were $16.9 million, according to Top500Guide.com. Summit wants to boost online sales closer to 80% of total sales, Schepper says, but the company’s retail stores, which now total nine with the addition of Austin Kayak, are important for customers and serve as a good training ground for office and Internet employees.
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