Ever heard of GSM Outdoors? They just bought Cold steel.

marcinek said:
And what percent of CS's business, is, or was, "people on this forum"?

I think we all overestimate our importance in the business of the larger knife companies.
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Normally I would agree... but unlike other large knife companies CS isn't in brick and mortar... at least the big boxes.
 
marcinek said:
Good on him. Whatever one thinks of him or hi product, at the very least the man deserves credit for being able to sell the hell out of a knife.
Here's to 'ya! wont be same around here without 'ya!
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spot on!
but don't be surprise if future new owners
resurrect a lifelike virtual lynn thompson
cgi character for future product promotion videos :) a good thing lives on forever !
 
marcinek said:
Good on him. Whatever one thinks of him or hi product, at the very least the man deserves credit for being able to sell the hell out of a knife.

Here's to 'ya! wont be same around here without 'ya!

mojxfhm.gif
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Pretty dangerous, but dayum, that dodge though.
 
Really hoping that if it's true that everyone was laid off, especially right before Christmas, they were at least given some sort of decent severance. If so, good on Lynn. If not, very disappointing.
 
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I'm just hoping it's a slow descent into being whatever it's going to be. I'm 99.9% sure it isn't going to be a lateral move, we really haven't seen one of those in the knife business since Camillus bought Western in the 90's. Looking at their website, it's hard to see if they'll position Cold Steel as a mid-level brand, or take it even lower.

Fiskars changed Gerber slowly. They bought them in 87, and it really didn't go too bad till 2000 or so, and now they seem to be trying to improve. Also, for as much crap as Taylor brands got, they did try to keep Schrade halfway decent for a budget brand. But those were also cases of established knife people buying a brand.

I guess we'll know when the first "new for 2021" promos come out.
 
Typically in a small head count sale like this, it is pretty easy to secure at least a couple months of employment. It isn't a huge impact to the buyer and often they see it as beneficial just for carry-over. Mind you, they don't tell them they're going to get laid off.

I have personal experience with select employees being negotiated into the contract with one year guarantees. That's a select few but still, it can happen.

While we don't know when this sale was final, the fact that nothing was leaked by employees makes me think they just found out about it. If they did get laid off almost immediately, while it is of course very speculative, it's hard to understand how there wasn't a provision negotiated for them.

In these buyouts, it has been my experience that there generally isn't.

As said, they may have been given a decent severance and I hope that is the case. But, it is not beyond the realm of possibility that there could have been negotiations to not say anything about layoffs until after the first of the year. A lot we don't know but it is a bad optic if true.

I'd like to know if Lynn addressed the employees directly. There's only a couple dozen or so.
 
Steely_Gunz said:
While I havent been a huge fan of their knife line up for some years short of an XL Voyager I bought a month or two ago on a whim, I have long held their specialty items in high regard. I probably own close to 12 of their tomahawks and axes.

My first "good" knife was a Carbon V Trailmaster i bought back in 2002. It was a gateway into what this hobby has to offer when you step up to the next tier. I will say that I eventually outgrew most of their products short of the axes and hawks that are durable bangs for your buck.

I don't see this ending well for the brand as we know it. Without Mr. Thompson at the wheel, I don't see how they keep pushing the high strength/high value/moderate price point angle. The profitable low hanging fruit for a larger company is going to be inexpensive and mass produced. I work in a business where manufacturers a purchased by big groups from time to time. It seems that those that have been bought and sold a time or two usually handle about the same. When one group buys it from another, they are just trying to figure out how to make it .05% more efficient/profitable above market projections and sell it in 5 years or something. Old workers get screwed, product gets sourced elsewhere, a bit more Styrofoam get added to the sausage to keep the price low and profits up. It works a bit.

However, I have seen a couple of first time bought companies struggle. One of the manufacturers I purchase a lot from is run by the son of the founder and has been for decades. The "Old man" retired a few years back and is a spry 86. His son is about 60 and the group offering to buy them overpaid them by what the owners figured was double (They figured $500,000,000-$600,000,000. The group thought $1.1B) Who wouldn't take that deal? Now the buying group has a company that they are basically upside down with and don't know how to run. My sales rep who has been at the game for 20 years says it's like a 9 year old getting behind the wheel of an F-1 racecar.
However, I see where Mr. Thompson is coming from. I run my family's business and I can tell you that I would fold like a house of cards and get out of here tomorrow for a fraction of a fraction of what some would as long as my dad, uncle, brother, and myself were all comfortable. No one runs a business because they owe it to someone else. You start it or buy it, build it, grow it, and then either sell it or pass it on. My family has been doing my line of work nearly SEVENTY years. 3 generations and my little brother is 20 years younger than me, so basically 4 generations. As I highly doubt my daughter wants a turn at this, it'll be up to my brother as to what happens and if we close up. I adore what we do, but I don't owe my LIFE to making sure I keep it going for my customers. At the end of the day, I want as many days in warm places enjoying the time I have left because I worked hard and not compelled to feel I have a debt to do it until I die. I don't fault Mr. Thompson for that if he chose the money path.
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Thanks for the thoughtful discussion. Your points were useful for the direction of this thread. And as a business owner, you help us all appreciate Lynn Thompson s position.

Lynn started his business forty years ago. His success in achieving a a product line of relatively high quality at at modest price is undeniable. With no children to keep the business in the family, his sale of the company is another of his good business decisions.

I hope he stays involved with the future direction of the company. But if he retires, he certainly isn t leaving work at a young age. He s been a valuable member of the knife enthusiast family and I ll miss him.

All the best to him.
 
Eli Chaps said:
Not sure if it was this thread or the one in the CS sub-forum but people were saying it was too bad Sal didn't buy him out. I really think people have a massively skewed view of these businesses. Spyderco and Cold Steel both ran around $10M in annual revenue. Kershaw alone runs about $30M with the parent company of KAI at $100M. Buck is somewhere around $60M. Victorinox pushes $500M in annual revenue.

Spyderco and Cold Steel have less than 100 employees. As successful as they are, they are not major players in terms of capital weight in the cutlery world. They target a specific market, although they try to diversify it, they are still targeting certain segments.

The members here and this forum wouldn't make a ripple in pocket/sporting knife revenue generation when taken as a whole.

Those big numbers come from budget stuff in clam shell packages in budget slinging stores. Where do folks think GSM/Gridiron is gonna go?
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Thanks for supplying these numbers. I had only a vague idea of where the knife companies stood in terms of sales. What about Benchmade?
 
This is interesting. I've followed GSM for a long time. "Good Sportsman Marketing" Hopefully they can add more than just marketing to this brand, but I have seen them turn many thriving small businesses that were customer focused into machines that lose the praise and authority the founders fought so hard for. Their customer service is notoriously not very good, I think their focus is more on how to market the product and get it to the masses rather than grow their repeat customer base. Everyone has their own way of doing business. As previously mentioned, they are tossed around between financial firms pretty often. Not sure why that is the case.
 
unwisefool said:
Do we know for sure that the employees were fired? If true that is pretty crappy. Especially since you can have employees stay on as terms of the sale.
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Eli Chaps said:
Typically in a small head count sale like this, it is pretty easy to secure at least a couple months of employment. It isn't a huge impact to the buyer and often they see it as beneficial just for carry-over. Mind you, they don't tell them they're going to get laid off.

I have personal experience with select employees being negotiated into the contract with one year guarantees. That's a select few but still, it can happen.

While we don't know when this sale was final, the fact that nothing was leaked by employees makes me think they just found out about it. If they did get laid off almost immediately, while it is of course very speculative, it's hard to understand how there wasn't a provision negotiated for them.

In these buyouts, it has been my experience that there generally isn't.

As said, they may have been given a decent severance and I hope that is the case. But, it is not beyond the realm of possibility that there could have been negotiations to not say anything about layoffs until after the first of the year. A lot we don't know but it is a bad optic if true.

I'd like to know if Lynn addressed the employees directly. There's only a couple dozen or so.
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They’re already relocating everything to Texas, so it’s extremely unlikely that they’d keep very many people at the bottom. It’s not like they have folks working in skilled manufacturing. Are they going to relocate warehouse staff and warranty clerks?

The other thing is that this will have been in the works for, at minimum, a few months. Just doing the due diligence on this sort of thing takes a while. Which means GSM would’ve been working on this deal while the two investment companies were working on the purchase/sale of GSM. Honestly, I’d be shocked if people at CS didn’t know this was coming way ahead of time.
 
OrangeBlueOrangeBlue said:
They’re already relocating everything to Texas, so it’s extremely unlikely that they’d keep very many people at the bottom. It’s not like they have folks working in skilled manufacturing. Are they going to relocate warehouse staff and warranty clerks?

The other thing is that this will have been in the works for, at minimum, a few months. Just doing the due diligence on this sort of thing takes a while. Which means GSM would’ve been working on this deal while the two investment companies were working on the purchase/sale of GSM. Honestly, I’d be shocked if people at CS didn’t know this was coming way ahead of time.
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Oh, I know how it all works and plays out. I was simply presenting something for discussion. As near as I can tell, CS had around 40 people stateside. That's not a terrible stretch for a retention with post new year reduction. If what we're hearing is true, that didn't happen and I would tend to think it didn't.

I'd guess this has been in the works far longer than a few months but maybe.

Having been through numerous reductions, I'd be surprised if the people at CS actually knew what was going on. They may well have felt that things were changing and been concerned about the future and even been gossiping about buyouts, but that would mean there was a lot of obvious stuff right in front of them.

I obviously have no actual idea of this situation but I would guess that folks knew something was up but most didn't realize just how bad it was.

Again, Lynn Thompson had less than 100 people working for him. Did he address them directly? Not a letter but a meeting. That, to me is the question to be answered.
 
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Eli Chaps said:
Does this mean they're gonna start filming them in the dungeon hacking up deer instead of pigs now?
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The do donate the bodies of the pigs to homeless shelters, from what I’ve hard that’s why they put the tarps down. It just happens that they prechop the meat they give.
(No word about the skulls) they’re lesser demand and probably waste.
 
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Quiet said:
Yep. There's some small task that needs doing. On a nearby table are two tools, a hammer, and a surgical scalpel. We all know Sal's first thought would be to reach for the scalpel. Lynn Thompson on the other hand, his first instinct would have been to kick the table over, break one of the legs off and use that.
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Haha. That was funny, and true.
 
OrangeBlueOrangeBlue said:
They’re already relocating everything to Texas, so it’s extremely unlikely that they’d keep very many people at the bottom. It’s not like they have folks working in skilled manufacturing. Are they going to relocate warehouse staff and warranty clerks?

The other thing is that this will have been in the works for, at minimum, a few months. Just doing the due diligence on this sort of thing takes a while. Which means GSM would’ve been working on this deal while the two investment companies were working on the purchase/sale of GSM. Honestly, I’d be shocked if people at CS didn’t know this was coming way ahead of time.
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I worked at a 100 million dollar company that sold to an investment firm, nobody had any idea, including top level employees in the company. We had a plant meeting and the owner said "we sold and sign papers next week".
 
willc said:
It would of been cool if Lynn sold the company to Sal Glesser, but I doubt Spyderco could free up the cash that these bean counters can.

I am sure that this will be the downward spiral for CS.
These investment companies are generally scum.

I hope Lynn enjoys his retirement and that any employees that were let go have a backup plan.
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I'd prefer Sal spent his hypothetical CS cash on saving Al Mar instead :'(
 
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