How Arc’teryx is reaching new heights while staying loyal to its core customers

Episode transcript, edited for clarity

Bill Thorne:  Welcome to Retail Gets Real, where we hear from retail’s most fascinating leaders about the industry that impacts everyone everywhere, every day. I’m Bill Thorne from the National Retail Federation, and on today’s episode we’re going to be talking to Stuart Haselden, CEO of Arc’teryx.

We’re going to talk to Stuart about his years of global experience in retail, his plans for growing the high-performance outerwear and equipment brand, and his lessons in leadership.

Stuart Haselden, welcome to Retail Gets Real.

Stuart Haselden:  Thanks, Bill. Good to be here. 

Thorne: So, you have had an extraordinary journey in retail. You’ve worked at a lot of different retailers, a lot of iconic retailers. How did you get from there to here? What does that path look like?

Haselden: Yeah, it’s a long and winding road. I’ll try to share some of the highlights and not bore you too much, Bill, but I do have to say, you know, my professional life started not in retail. I was a U.S. Army officer and so four years after duty, and that really shaped my view on leadership and really the world.

I bring that into many parts of the career path I’ve had in retail. And started, at stores, right around 2000 and made that decision really as a transition out of the military into the business world. No particular passion for retail in the beginning, but at Saks, I quickly fell in love with retail and the pace of the business, the dynamic nature of the industry. Reinventing your product line every few months. It was a business that I also saw as particularly dependent on leadership more than other industries.

Those things really appealed to me and fell in love with it there at Saks. Followed my boss at the time — he left Saks in 2005 to join J.Crew as the CFO, and I went with him. And if I liked retail or love retail stocks — at J.Crew, it was the next level. Vertical retail under Mickey Drexler was an incredible experience. Mickey [is] such a dynamic leader, such a visionary leader. And I learned a lot from him just in terms of how he ran the company and the way he made decisions. And just came to understand vertical where you control every part of the business from design to sourcing, to store execution, and if you succeeded, it was because you made good decisions. And if you didn’t, it was on you. And so, I love that control, that ability to sort of chart the path of the brand in every regard.

I fell in love with vertical there at J.Crew, and, and really took a lot from that time with Mickey. I was there nine years and rose within the finance side of the house. And was CFO the last couple of years I was at J.Crew.

Left at the end of 2014 to join Lululemon as the CFO at a really a point of transition for Lulu. There had been a great journey from IPO — high-growth — but then really Lulu outgrew its infrastructure and had some issues with product quality. Comps turned negative and the company was really in transition in 2013-2014. I joined as a part of a new leadership team tasked with turning around Lululemon and building the infrastructure and the strategy for the phase of growth that it currently continues to be finding great success. And so that was super rewarding and that experience at Lulu led me out of just the finance discipline.

I had always had a very broad view on my role, both at, at Lululemon and J.Crew. Not a functionalist, very much enabling the success of the business across every part of the company. What’s great about finance is you see every part of the company, you know, you’re involved in helping guide and steer the company in every aspect.

I love that. But at Lulu, I became involved in operations, so supply chain technology, and then ultimately was responsible for leading the international business at Lulu. So, all of the business operations outside of North America, and great experience, great brand. And we had a pretty exciting experience transforming the company from what it had been into a truly global brand.

I was there about five years and then I joined the board of a little company in New York called Away Travel and became fascinated with the D2C. Or, I’m sorry, the digital native, millennial, unicorn company that it was at the time. It kind of became intrigued with the idea of helping grow something really from the beginning and to take more of a startup, and take everything I had learned, you know, at these larger companies and bring it to help the small company to achieve its ambitions. And I left Lululemon to join Away right in the beginning of 2020.

Thorne: Great timing.

Haselden: Great timing. Right into the teeth of CPVOD and quickly the …

Thorne: Travel kind of took a hit around that time.

Haselden: A little bit. A little bit. Yeah. It was a challenging, new experience where it was about more about liquidity and keeping the company afloat and making difficult decisions. So, in the midst of that, I was then approached by some folks that I had had known at Lulu, who were then involved with a large global company called AM Sports, in particular a company that I knew well as a customer, Arc’teryx, and so this was really a dream job. You know, my deep passion for the mountains and the outdoors sort of combined with my experience in retail and vertical retail specifically was exactly what the company needed at that in this point in time. And so, the opportunity to join Arc’teryx, to lead it in its next chapter, was just something I couldn’t say no to. It’s been absolutely amazing experience and I couldn’t be happier with the opportunity and where we’re headed.

Thorne: I’ll tell you — if listeners haven’t been to your website, they need to go. That is the, probably one of the most interesting and engaging retail websites I’ve ever visited. The movies alone, the videos are just unbelievable. It’s easy to navigate. It’s very, you know, eye candy on steroids, and it’s just … it’s really fantastic. I recommend it to everyone that’s listening. Go to the website.

You know, in order to do all that you have done in order to have taken on these challenges, you know, every single one, bringing new and different challenges to you personally and professionally. You have to have a leadership style in order to — it is always evolving, but I mean, there’s something at the core, and maybe that’s something that you got in the Army or maybe it’s something that’s just that you’ve learned, you know, through your years. But if you were to describe your leadership style, what would that look like?

Haselden: Yeah, I’d say a couple things. I think first and foremost, you know, deeply ingrained in my — like I said, my DNA, you know, from my time in the military — is the sense of team first. Always putting the needs of the team, the mission of the team before everything else, and ensuring that team-first orientation is infused in everything you do.

The second thing I’d say is: Lead by example. The most profound and powerful form of leadership is your personal example, and so, you know, leading shoulder to shoulder with folks. Always being ready to dive in, get your hands dirty, and lead side-by-side. I think those are things that are deeply ingrained in me.

And then I would say, from a philosophy standpoint, leading organizations, I see my role importantly as setting the vision for the organization with clarity and then bringing the resources to the table to enable that vision and then getting out of the way. Allowing the leaders on my team to bring their passions and enthusiasms and innovation to find the best way, the smartest way to achieve that vision. And creating a culture that enables folks to thrive and to have that autonomy to find the best ways to win. That’s the type of company I want to be a part of and certainly what we’re trying to create at Arc’teryx.

Thorne: Leadership is so much about culture. I mean, it’s establishing the culture, and it’s leading the culture, and it’s living the culture. And I think that successful businesspeople or even just successful professionals recognize that, and they contribute and they, and I love the idea, you know, you, you said it, and then get out of the way. Let people have their experience to learn, to grow, and to succeed. And I think that’s the sign of a true leader. So Arc’teryx — what is the customer for Arc’teryx today?

Haselden: Yeah, great question. You know, the company was founded by two gentlemen from British Columbia. Dave Lane and Jeremy Guard, [in] 1989. They were climbers and they were frustrated with a lot of the products that were available then for their, their outdoor pursuits, mainly in climbing. And the company was born from that problem-solving. And for many years it was a niche brand that was really serving these hardcore mountain enthusiasts. You know, we still refer to them as sort of the core mountain athlete and to this day, that’s who we — is in our design process — who we focus on serving.

But the customer base has grown — as you might expect — and as the company has expanded and now very global. You know, we still have that core mountain athlete — that “dirtbag climbers,” we also call them — and we can never lose our focus on them. We always have to be building products in service to them. And we’re happy that we are also attracting folks who want to walk their dog or stand in the pouring rain on the soccer pitch. So, it’s great for that as well. We don’t design for that but nonetheless, it’s really good for some of those other activities. And so, we’ve been able to broaden the appeal of the brand to folks who are just using our products for everyday life. But we believe deeply that the appeal of the brand is that we remain focused and authentic in our support and designing for that mountain athlete.

Thorne: It’s so funny that you said that about the dog walking. So, the first time I ever visited Arc’teryx was the store we were talking about earlier here in City Center. And I’m, you know, I’m a southerner. I get cold. I hate cold. I always tell people you know, in the south they say, “Oh, it’s hot and humid.” I thought, “Well, that’s uncomfortable. But when it’s cold, it’s painful.” I don’t like pain. And so everybody had said, “Well, you should go buy Arc’teryx.” So, I did to get a pair of gloves so that when I was walking the dog and we had a polar vortex, you know, I wouldn’t be willing to take the dog back to the kennel and, you know, leave him there. I appreciate that and I appreciate you looking out for the dog walkers as well as the mountain climbers.

Haselden: Happy to help.

Thorne: And I’m happy to pay for it.

So, you know, there’s a lot of companies that do a lot of, you know, outdoors — suiting people up, getting them ready, to do all kinds of different activities. Cold weather, warm weather, it doesn’t matter. But what makes your brand unique?

Haselden: Yeah, it’s a great question. The first thing I’d say is: There’s something that’s really important about where we’re from. The Coast Mountains of British Columbia. And folks here at the company often say that the company could not have really been born anywhere else. And it’s an interesting combination of the climate, the terrain, and the geography. You know, it’s really rainy here. It does get cold, especially as you get farther from the coast. The terrain is very rugged, very mountainous. And the geography is such that in 45 minutes you can get deep into the back country of British Columbia and find some of the most awe-inspiring terrain for any mountain pursuit.

That element of where we’re from is a big part of how the company was born. And so, solving problems for passionate mountain athletes who are in this community, in those mountains. You know, solving for the needs for their particular sports is really an important catalyst for what makes this unique.

And I would say, that connects to how we design our products. Our design center — if you visited here in North Vancouver — it looks more like a factory floor than what you might think of as an apparel design center. Our designers are all world-class athletes. Many of them are former Olympians from the Canadian, U.S. national teams. They’re designing for themselves. They’re solving the problems for themselves. It’s not unusual for a designer to build a product in the morning at our design center, take it on the mountain in the afternoon, beat the crap out of it, bring it back to the design center the next morning to iterate and improve on it.

So, it’s hands-on. It’s real, it’s authentic. It’s aimed at really solving those problems on the mountain. Not some business brief for how we’re going to win market share and extra … . It’s about athletes really building for themselves in most cases. So that authenticity is really, I think, really what makes us unique.

Thorne: That’s awesome. You’re growing … what is your strategy for growth?

Haselden: Yeah, it’s been an incredible journey. We’ve nearly tripled the business in the last three, four years. And we just went through an IPO process as well, and those conversations often got the question: How are you doing this? How are you unlocking this incredible growth trajectory? The answer, I think, really focuses on the D2C or vertical transformation of the business. We had, Arc’teryx had always been a great design company from the very beginning. Dave and Jeremy started it, and it had always grown at a smaller pace. Always as a wholesale brand. And as I joined in the beginning of 2021, my mandate was to take this wholesale business and transform it into a vertical, D2C business.

And so, in 2019, 2020 were, we were 80% wholesale. And so, we ended 2023, more than 70% direct to consumer. So, an incredible transformation — certainly that pace or that speed of transforming — it was accelerated through COVID. So that was an element of it. But nonetheless, we have now reinvented the company as a vertical brand. We see it as really the only vertical brand in the outdoor space, and that that has been the catalyst for this remarkable acceleration in the growth trajectory. And so, as we look into the future, we’re just getting started. We’ve got just around 50 stores in North America today, half of that in the U.S., so just 25 stores in the U.S.

Thorne: Really? 

Haselden: Long runway of growth. And we ended last year, 2023, you know, around $1.5 billion. As we look into the future, you know, this is not a small company, and we see the momentum from last year. We grew over 50% in 2023. We see that momentum continuing to this year and remarkably the brand is resonating in every region that we operate. From Europe to North America, to Japan, to China, Australia – so it’s a brand that translates literally around the world and has appeal. Yeah.

Thorne: I doubt you’re going to be opening a store in Savannah anytime soon or Charleston.

Haselden: Not soon but I’d love too. Yeah. 

Thorne: It’d be nice to be home. So, just a couple of things. We have a lot of students that listen to Retail Gets Real. I don’t think it’s because they just wait up every Thursday waiting for the next episode. It’s usually because their professors required as a part of their syllabus, but they’re listening. And one of the things I like to find out from successful people like you is what is the best piece of career advice that you’ve ever received? 

Haselden: Yes. Great question. I mentioned, I worked for Mickey Drexler, and Mickey had something he used to say to us. And I don’t know if he meant it as career advice [or] more of, you know, how to get things done. But it went something like this — assume it’s your fault. And what he meant by that was no matter what the situation, take responsibility. If you do that, if you come from a place of personal responsibility in everything you do, it’s empowering. And you don’t get stuck in excuses or, you know, who did what. It’s like, how do we win? How [do] I take responsibility for what I can control, and help create the best outcomes? And so that idea of always assume it’s your fault, and what can you do different to, you know, influence for the good — for the positive — I think is a great piece of advice. 

And something I actually share when I talk to students, often is, don’t get stuck in your circumstance. Always think of how you can move forward no matter what. 

Thorne: We’ve got to figure out some way to get you to our student program in January. We have our Big Show in January in New York, and since you seem to like the cold, you [would] probably enjoy it. But the student program, we bring students from all over the country, about 1,600. And your story is incredibly interesting. I think that the thing that they would get most out of it is that you don’t have to start with the idea that you’re going into retail. But once you get into it, you learn the passion, and you learn the business and it excites you. You continue to grow and to learn. So, speaking of exciting, what excites you most about the future of retail?

Haselden: I’ll give answer for Arc’teryx and sort of broadly for the industry. For our business it’s the sort of the continued expansion that I described, and sort of — certainly from our channel expansion with new stores — but also from a product standpoint, with, you know, key categories that we’re expanding.

We just launched — a new relaunch, I should say — our footwear business. We opened a footwear design center in Portland, Oregon, a couple years ago, and the first designs from that team hit the market this past March, and it was a wild success. And so, we’re really excited for how we’ll grow the footwear business now.

And then within our core, you know, sustainability [and] circularity is something we’re passionate about and we’re constantly researching ways we can build products that are more and more sustainable and circular. There’s some exciting things we’ll be introducing into the market in the coming years that we believe could be transformative, and so that’s really exciting for us.

And then, you know, stepping aside and looking at the industry broadly — the pace of change just seems to continue to accelerate. I think it wasn’t too long ago we were talking about big data and what is that? How do … what do you do with big data? And then it was machine learning and now that’s connected to AI, and so these are things that will shape our industry profoundly into the future. I think it’s exciting. This is something I continue to try to stay smart on and it’s a struggle. But how to stay attuned to these emerging technologies and how you can harness them into mature businesses. So, I think that is probably the most exciting part of the industry horizon that’s emerging that I see.

Thorne: Stuart Haselden, it has been a pleasure talking with you. Thank you for us today on Retail Gets Real.

Haselden: Great to meet you and enjoyed it. Thank you.

Thorne: And thank you all for listening to another episode of Retail Gets Real. You can find more information about the episode and more at retail gets real dot com. I’m Bill Thorne. This is Retail Gets Real. Thanks again for listening. Until next time.