By Tiffany Montgomery | Originally Published August 31, 2021
An edited transcript our SES Live video interview with Bryce Phillips with lots of very interesting information, including evo’s annual revenue figures and early reads on the snow season.
For our recent SES Live video series, we had a great talk with Bryce Phillips, the CEO and Founder of evo, a key industry customer that has a robust online business in addition to four flagship stores.
Some key topics that we covered:
How much evo has grown in the last three years
Evo’s annual revenue for last year, and what is budgeted for the current fiscal year
The major Salt Lake City project opening soon
Current sales and category sales trends, including early reads on snow
If evo is an acquisition target and would Bryce consider selling
Future store expansion plans.
Watch a replay of the full interview below.
Below is an edited version of our conversation.
Evo Business Overview
I think a lot of people know your business, but for those who don’t, can you give a broad overview of evo?
Bryce Phillips: Evo is primarily a retail business. We have stores in North America and then a web business. We’re also in travel and a number of other adjacent businesses that are kind of emerging at this point. But the primary driver has been retail.
We’re on evo.com. And then we have stores in Whistler, Denver, Seattle, Portland, and we’re coming to Salt Lake City soon, as well as a couple of satellites in Hood River and Snoqualmie Pass.
Web vs. Brick-and-Mortar Breakdown
And what’s the breakdown between web and brick and mortar for you guys? Because you started online, right?
Bryce Phillips: I founded the company in 2001 and it was all web at that point. Last year, pre-COVID, we were 75% web, 25% brick and mortar. And we exited this last year 80/20. We would have thought it would have shifted more dramatically toward web given the surging on the web, but the stores have actually really held their own.
You have a great apparel selection and all accessories and footwear and everything, but it seems like hardgoods has been a real focus.
Bryce Phillips: When I started, the company was 100% hardgoods. I used to buy used skis and snowboards out of Whistler in the early days. I was up here chasing winters, living on couches, and buying demo skis and snowboards at the end of the year, bringing them into the States and selling them on eBay.
Fast forward nearly 20 years and our mix is a majority hardgoods, although we do have a really solid streetwear, outerwear, accessory business.
But it’s about 75% hardgoods. I kind of laugh thinking about that. Because many years ago, we thought we’d would move closer to 50/50. But the hardgoods business and the more technical products continues to be the focus.
Growth Over Last Three Years
And before COVID you guys were on a growth tear, right? So, can you put in perspective, over the last three years, how much has the evo business grown?
Bryce Phillips: It’s kind of wild. Because if I think about March of ’20, we put in place a plan to go backwards. Thankfully, we got everything wrong.
In three years, we’ve more than doubled the business, and last year we grew 45%. Again, completely unexpected. I couldn’t have imagined that it would have turned out this way, but feel very, very fortunate that it did.
Early Read on Snow
So in your current fiscal year, that started in April, what are you seeing? How is business?
Bryce Phillips: This year we have definitely mellower comps, like single digit comps. But margin’s been really, really good. I think customers know that if they want it, they should grab it.
We’re definitely seeing a little bit of – I don’t want to say fall off’s the right word. A two-year comp for some of our categories is still really, really strong. But we’ve seen a year-over-year decline in a few spring and summer categories. It’s not alarming by any means. I think it’s to be expected at some point. But skate and surf have been hit and miss. There’s been some really bright spots and then some other more challenging areas. Wake is similar.
I’ll finish saying that we’re seeing really good early signals for winter. I think that people are very excited about the season, getting outside. We’re seeing really good signs on ski, snowboard across the board.
Tell me more about snow. What do you mean? Are people buying early? Is it super technical stuff?
Bryce Phillips: Well, definitely the hot products, right? They know that it’s going be limited and there’s going to be challenges getting the stuff that you want in the season. So, we’re fairly certain demand is being pulled forward. So, while the comps look amazing, we would be naïve to assume that it’s all incremental, just given that people are pulling their purchasing forward.
And their behaviors are changing. Do you want a washer, dryer? Do you want a Capita snowboard? Do you want a hot new K2 ski? People are saying, “You want it, you better strike.” So, folks are definitely transacting early for the hot products.
So far, hardgoods have been really strong for skiing and snowboard, as have accessories and outerwear. And we’re seeing really robust pre-order. Pre-order’s an opportunity for customers to lock something in and we ship it as soon as it lands. That’s been pretty wild to see those comps.
But again, we’ll see how it plays out.
Salt Lake City Expansion
Tell us about Salt Lake City. For the people who don’t know what’s going on there, can you describe the project?
Bryce Phillips: The project’s name is Campus Salt Lake. It’s an extension of what we’ve done. In Seattle, we took an old warehouse that had been stitched together. It was left vacant. We rescued that building and brought in an evo flagship store, two restaurants, and a skate park called All Together Skate. It’s 25,000 square feet. It’s got a mix of uses. We own the store and the skate park. And in Salt Lake we’re just connecting that next dot. The whole project will be 120,000 square feet plus a multi-family housing project at some point, so we’ve acquired the adjacent parcel to do housing.
We did it as a joint venture with another development group. So, evo is actually the developer with Lake Union Partners. And in the project itself is a 30,000 square foot bouldering gym and All Together Skate. L9 Sports, another industry retailer, is going to be there, and an evo flagship store. And then a number of other food and beverage locations. But probably the biggest new move for us is we’re opening our first ever evo hotel.
The first phase of the Salt Lake City project, our store and hotel, will open this December. But we feel like we’re on track to open the rest by spring.
Satellite Stores Near Resorts
You guys are opening satellite stores. So, where are those opening and why are you opening them?
Bryce Phillips: We were just looking at new markets and we’re excited about those. But what about the markets where we already have really good traction? And we really want to meet our customers where they play, where they’re in the outdoors.
So, Hood River is an amazing community in and of itself. It’s a mecca for enthusiasts of all types. So, we’re excited about a little 2,000 square foot satellite store there. We’ll be focused on rental, demo, service, and have some light retail.
And the other one is Snoqualmie Pass, which is an hour east of Seattle. It’s right in the middle of a ski area. It’s actually where my family and I live now. We renovated an incredible 100-year-old historic fire station. So, the fire station is its own little campus in its own right. It’ll be a really great market cafe, called Laconia Market Cafe, an evo satellite store, and then we’re going to have co-working space there as well.
Flagship Expansion Strategy
And with the success of the stores, does that make you think there’s a lot of opportunity to open more of the flagship, big ones?
Bryce Phillips: I think it’s both. It’s kind of the double and triple down on the core. Where are we strong, how can we strengthen our position within markets via satellites or engaging customers in those markets? And then there’s looking for others that we feel are just bullseyes.
Salt Lake was an obvious next step after Denver. Denver, we opened in 2016. We have swept up every single adjacent space we possibly can. We’re actually opening a new location there, too. It’s going be a pure rental and service location. We bought a building next door.
With each one of our existing locations, we look to expand our footprint while at the same time looking for strategic spots where there’s a great market. And then part of that calculus, is obviously looking at web plus store and how those drive each other.
But for us, it’s quality, not quantity. We’re almost 20 years in and it sounds like we’re doing all these stores. Well, guess what? We’re in four places right now.
There’s not going to be a press release about the next 100 stores in the next five years. It’s right for some, I get it. But for us, that’s just not our approach.
And you don’t feel any pressure, given that it seems like Backcountry is opening stores and Dick’s is opening Public Lands? And I know they’re not you guys but they’re playing in the space. That doesn’t make you feel like, “Oh, we should open more”?
Bryce Phillips: No, not at all actually. They’re going to do it in a very different way. We’re competitive, of course, especially with Backcountry. They do a great job. Their approach is different. What I’ve seen so far is 2,000 to 5,000 square foot locations in shopping areas, which I think they’ll do well.
I get the strategy. I think it makes sense for them. But it doesn’t change our plan. We’ve seen great success. We have a lot of fun doing it. We look through a forever lens when we think about our moves we make and we’re just not in a rush. I’m excited to see what they do. I think the more we all can engage customers in a meaningful way it’s positive for everybody.
An Acquisition Target?
And, given your guys’ success, do people come around wanting to acquire you? You have the magic formula, right? It’s web plus the stores. It’s the formula everyone wants.
Bryce Phillips: Well, I appreciate that. Magic – I like that word. People reach out, for sure. We, and I personally, have no ambition to sell. At all. I love what we’re doing.
I feel like the opportunity we have when it comes to making a positive impact on our communities and the world, that’s something that we can play out for many decades and beyond.
We have global ambitions. We want to create incredible livelihoods for our employees and a long, sustainable path for them and their families.
And then, really leveraging this business to give back. We’ve really been able to stairstep the way in which we invest in our communities, specifically working with a number of organizations that focus on underserved youth. And that, for us, is forever inspiring. It’s a virtuous circle.
So, no near-term directives. I’m not trying to buy a massive yacht. It’s all about building something special and doing it over the long term.
Evo Annual Revenue
Well, speaking of buying a yacht (laughing). At one point you were publicly sharing your revenue. Are you open to doing that again?
Bryce Phillips: We move in and out of being public around it. But I’ll say we ended last year at $188 million, and our budget for this year, which we’re halfway through, is in the $200 million range.
But we know that we’re at the tip of the iceberg. We just think about the opportunity ahead and the ecosystem of businesses that we’re building out, the way in which they drive each other. So, it’s a big number based on my garage days, for sure. But it’s also small when we think about the bigger opportunity.
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