Spring 2019 - Inside Outdoor Magazine

Inside Outdoor | SPRING 2019 38 and then receiving them nine months later. The Colorado Business Bank was able to see those bank transfers and use that to partially collateralize some of the loan. IO: In other words, you don’t get slammed throughout the spring and summer months. You were able to pay back on a schedule that works for both parties. DA: That’s exactly right. Our bank- ing relationship with them is twofold. One is a loan, where we pay them every month, but the other is on a very large, million dollar line of credit. So we run the loan all year long, but that line of credit gets maxed out in July, and that’s when we own the inventory – but it’s on a ship coming across the ocean. So it allows us to make it to October when our cash starts flowing in, to start paying back that line of credit. IO: This approach doesn’t seem very common for the outdoor in- dustry. How did it come together? DA: The strategy was the result of our CFO, Scott Pearson, and bank- ers working together. Pearson started looking at different ways to collateral- ize the loan and made the argument that as soon as we place a deposit, the gear is just about made. We have a good track record and factories, and so the bank went to bat for us. It really comes down to the bankers being able to use the finan- cial story that our CFO put together, and that we had solid financials to show that everything was going to work out alright. IO: How will your financing benefit your customers? DA: By securing traditional financ- ing it keeps our costs as low as pos- sible. Doing an equity raise or using nontraditional financing would ulti- mately cost more. On a really large level, this strategy allows us to maintain control of our company and keep us bootstrapping. A venture capital firm would have wanted us to use their fulfillment, their logistics and arguably their marketing. That would have changed the whole scheme of how the company is set up, and would have set the wheels in mo- tion to start scaling up considerably. When you scale up bigger, you gener- ate more costs, and that translates to higher prices for customers. IO: You also have to operate on someone else’s agenda and sacrifice part of your company. Your company can change on a whim. DA: It isn’t necessarily a negative thing, but with our company a lot of our success can be attributed to slow, solid, consistent growth. A lot of that comes from the fact that we came about during the Great Recession and the credit crunch. So no one was look- ing for us to grow at a fast rate. When we were small and growing at 50 to 60 percent, instead of 100 percent, peo- ple were telling us that we should be happy being in business. Now that we are maintaining that growth, it allows us to maintain the essence of our brand and to continue financing the way we have been. IO: So for retailers, the message could be: This is the same Flylow, and the company is not changing. DA: It will also allow us to avoid running into shortages as we have had in the past. We have been on the wrong side of an inventory flood and have sold out of inventory in October and November during ski season, be- cause we were confined to just building for the wholesale channel. Now we can do special orders for wholesale, or supply a direct-to-consumer platform for regions that don’t have retailers. So we’re still very focused on the indepen- dent retailer and on selling whoslesale, as that’s our method, but we’re om- nichannel as a business. So we can do better for all of our consumers. m BrandWatch Not just a winter sports company, the Hawkins shirt and Carter shorts are out of Flylow’s women’s trail collection. Flylow’s lightest kit yet, the Cooper Jacket and Smyth Bibs “bring stretch and breathability to a whole new level.”