West Marine CEO discusses the company’s refocus on core customers

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West Marine CEO Doug Robinson says the company will return its focus on core boaters and wholesalers.

West Marine CEO Doug Robinson says the company will return its focus on core boaters and wholesalers.

NEW YORK — West Marine is refocusing on its core customers in an effort to regain market share lost in recent years.

The company has undergone significant changes since being sold to private equity firm Monomoy Capital Partners last fall.

West Marine reduced staff by 20 percent at its Watsonville, Calif., headquarters so it could add staff in retail stores and invest in other areas, such as price reductions.

“The organization, over the years as a public company, had become very top heavy in terms of senior leadership,” West Marine CEO Doug Robinson told Trade Only Today at the Monomoy offices in Manhattan.

Some of the leadership was necessary as a public company filing quarterly reports and Securities and Exchange Commission filings, Robinson said.

“We took those costs out of the business because we no longer have to do those filings, and no longer need that corporate overhead,” he said.

Part of the reduction was to invest in local stores and give team members more influence over merchandise, promotions and events, Robinson said.

“We had a very deep decision-making management team — many layers,” he said. “Our mandate is to be the best in an individual market that we can be in that marketplace. We expect each of our stores to be the best boat suppliers in their town. In order to do that, we had to shift a lot of that responsibility from Watsonville to our local stores.”

The company flattened the organization from five levels of executives to two, he said.

“We took costs out of our Watsonville office so the stores could do more of the decision making, and took a fairly large part of that savings out of the corporate office and added more payroll dollars in local stores,” Robinson said. “We put more staff in stores that had traditionally been understaffed.”

The supply chain had lost its focus on core boaters and wholesale customers because product offerings had expanded to include items that can be bought in many other locations, Robinson said. Also, it had shifted to a one-size-fits-all concept for stores, from merchandising to advertising, he said.

That meant that stores in coastal Rhode Island would carry the same merchandise as a store serving inland Texas lake boaters, he said.

“The store managers in Texas had been telling Watsonville, ‘We don’t sell these offshore flares — we need engine parts because we always run out,’” Robinson said. “We’ve changed systems and processes so the stores can be responsible for local inventories.

“We’re not going to know fishing tackle in South Carolina versus Rhode Island; if we’re going to be the best locally, we need to make those decisions locally,” he said.

The company will also focus marketing locally rather than nationally, Robinson said.

West Marine has also changed its terms, something that vendors had complained about since payment terms went from 30 days to 90 days for items that are inventoried.

The company had to keep the new cost structure in line with the announcement made in March: “Won’t Be Beat — Price Match Guarantee.”

“We live in a world of price transparency that has never been seen in the retail world,” Robinson said. “We price-match anyone and everyone, including Amazon. What we’re trying to do is make sure our customers know they can get as fair a price with us as anyone else and can buy from their local supplier.”

Robinson said 90-day terms are standard in hard goods when businesses are stocking inventory, and are consistent with publicly traded companies.

“We carry inventory 180 days,” he said. “We’re asking vendors to cost-share the inventory. There are some vendors we do business with that we pay in 30 days or less because we don’t stock their inventory. It’s a business decision around how do we share the burden of costs for products we hold in inventory so they’re available to the customer right away? That’s beneficial to both the manufacturer and to us because they get the inventory closer to the customer.”

West Marine has no plans to close or expand individual stores at this time, Robinson said.

Asked about the reception to the changes, Robinson said: “It’s been great. They’re excited that the focus is on core customers.”

Read more about the company’s transformation in the coming issue of Soundings Trade Only.


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