Outdoor Industry Business Tricks

Monday, 19 November 2007
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For some reason, the outdoor industry has convinced us that business practices are all about being nice to each other and working together for the greater good. Of course, in real life it isn't really that way.

Over the past week, two interesting business stories have surfaced shows a small look into the business world of the outdoor industry and it's not always pretty.

Crocs Inc.
Crocs Inc. LogoKirby McInerney has just announced a class action lawsuit on behalf of Crocs Inc. Investors. The suit is claiming that Crocs Inc. issued false and misleading statements that failed to disclose distribution problems in Europe and Japan as well as drops in sales was starting to slow in regions with cold weather climates. The suit also claims that the Company's inventory levels were building far beyond historic levels as sales began to slow.

The lawsuit has just been filed so it will be a while until the issue will be resolved.

Garmin Inc.
Garmin Inc. LogoTech Dirt published a fantastic analysis of Garmin's battle against archrival, TomTom. Last year, TomTom agreed to buy mapping service Tele Atlas and many people thought that this would leave Garmin without available electronic maps to use in their GPS units.

In a very strategic move, Garmin bought up 5% of Tele Atlas' shares on the open market forcing TomTom to increase it's bid from $2.5 billion to almost $4.2 billion.

Business analysts were watching to see if Garmin would up the bid for Tele Atlas. They didn't and instead pulled a very interesting trick. First they signed a long-term deal with Tele Atlas' main competitor Navteq. This guaranteed that they would still have access to maps. Now they don't need to worry about losing map access as well as paying 3.3 billion to purchase Tele Atlas. The real gem in the whole thing is the process forced TomTom (remember, arch rival) to pay 1.7 billion more than they wanted to. Remember that 5% share purchase? They are going to make small amount of change off that deal as well!

More info:
Crocs Info: snewsnet.com
Garmin Info: techdirt.com

For some reason, the outdoor industry has convinced us that business practices are all about being nice to each other and working together for the greater good. Of course, in real life it isn't really that way.

Over the past week, two interesting business stories have surfaced shows a small look into the business world of the outdoor industry and it's not always pretty.

Crocs Inc.
Crocs Inc. LogoKirby McInerney has just announced a class action lawsuit on behalf of Crocs Inc. Investors. The suit is claiming that Crocs Inc. issued false and misleading statements that failed to disclose distribution problems in Europe and Japan as well as drops in sales was starting to slow in regions with cold weather climates. The suit also claims that the Company's inventory levels were building far beyond historic levels as sales began to slow.

The lawsuit has just been filed so it will be a while until the issue will be resolved.

Garmin Inc.
Garmin Inc. LogoTech Dirt published a fantastic analysis of Garmin's battle against archrival, TomTom. Last year, TomTom agreed to buy mapping service Tele Atlas and many people thought that this would leave Garmin without available electronic maps to use in their GPS units.

In a very strategic move, Garmin bought up 5% of Tele Atlas' shares on the open market forcing TomTom to increase it's bid from $2.5 billion to almost $4.2 billion.

Business analysts were watching to see if Garmin would up the bid for Tele Atlas. They didn't and instead pulled a very interesting trick. First they signed a long-term deal with Tele Atlas' main competitor Navteq. This guaranteed that they would still have access to maps. Now they don't need to worry about losing map access as well as paying 3.3 billion to purchase Tele Atlas. The real gem in the whole thing is the process forced TomTom (remember, arch rival) to pay 1.7 billion more than they wanted to. Remember that 5% share purchase? They are going to make small amount of change off that deal as well!

More info:
Crocs Info: snewsnet.com
Garmin Info: techdirt.com

David Johnston

David Johnston

David Johnston has been introducing people to the sport of sea kayaking for the past 15 years. He is a senior instructor trainer with Paddle Canada and teaches for several paddling schools in Ontario, Canada. Full Bio.

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