Solo Brands, a company with a portfolio of lifestyle brands including Solo Stove, Chubbies, Oru Kayak, ISLE and Icy Breeze, has announced that President and CEO John Merris will step down from his post, effective Jan. 15, 2024, when Christopher Metz, who most recently served as CEO of Vista Outdoor Inc., will take over.
Metz has more than 25 years of experience leading consumer and durable goods companies. During his five-plus years at Vista Outdoor, he helped reposition and transform the business, growing revenue and profits to “historic highs” by focusing on organic growth, direct-to-consumer (DTC) initiatives and strategic acquisitions, according to a Solo Brands press release. He also helped rebalance Vista Outdoor’s balance sheet and improve overall cash flow.
Steep Marketing Spend, without Results
News of Merris’s departure came as Solo Brands lowered its financial guidance for the 2023 fiscal year: revenue is now expected to be between $490 million and $500 million, which is a modest drop from the company’s previous guidance of between $520 million and $540 million. Although Solo Brands plans to share more extensive financial details in its fiscal 2023 results call in March, interim CFO Andrea Tarbox shared in a statement that Q4 results “came in below expectations as we experienced softer-than-anticipated sales in our direct channel.” This was a long-term trend, with Q3 2023 direct sales also falling 11.6% year over year.
In addition to plummeting DTC sales, Solo Brands was spending a substantial amount of money on brand awareness campaigns designed to drive customer acquisition. Most notably, the company collaborated with rapper Snoop Dogg on a buzz-building campaign for Solo Stove in which he proclaimed he was “quitting smoke.” Build buzz it did, but it did not drive the financial gains executive leadership was looking for.
“While our unique marketing campaigns raised brand awareness of Solo Stove to an expanded and new audience of consumers, it did not lead to the sales lift that we had planned, which, combined with the increased marketing investments, negatively impacted our EBITDA,” Tarbox explained. “We believe there is a significant opportunity for us to build awareness and that these new campaigns will expand our reach and benefit our brands over the long term.”
Despite less-than-stellar sales for its direct business, Solo Brands has been seeing a hearty boost in its wholesale division. Merris noted in an episode of the Retail Remix podcast that the company was doubling down on its partnerships with retailers like Ace Hardware, Dick’s Sporting Goods and Lowe’s.
“What we’re finding is that we can drive a lot of traffic, and frankly a lot of new traffic, with retail wholesale partners in stores,” Merris said in the episode. “What that’s allowed us to do is ratchet back digital marketing spend, which is focused on driving traffic.”
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