HUF joins forces with Altamont Capital Partners
Skate brand HUF has brought on private equity firm Altamont Capital Partners as investors to help support the brand’s growth.
Altamont Capital currently owns Dakine, which it bought from Billabong, and Mervin Manufacturing, which it bought from Quiksilver. It is also in the running to buy Fox Head Inc.
We’ve noticed HUF getting some prominent space in important retailers lately, and footwear is a major focus for the brand. HUF, headquartered in Los Angeles, also sells apparel, headwear and accessories.
HUF Founder and Partner Keith Hufnagel answered some questions for us about the deal and what it means. Keith, Jai Baek and Joanne Baek are all owners and run the business together.
The company currently has 52 employees with plans to add more.
Why were you looking for a financial partner?
Keith Hufnagel: There are a few reasons.
HUF has been growing very quickly. Our business has also been getting more complicated as we add product categories and grow internationally. It was becoming clear that our infrastructure needed to catch up with our business for us to continue our success.
We are also making investments for our customers and retailers. We are building on our early footwear success with new products like the Thrasher Collaboration and the Hufnagel 2.
We are opening a retail store on Fairfax early next year. And we continue to invest in our in-store presentations with our wholesale accounts. And these are just a few examples.
All the owners felt that outside capital would help us achieve our goals much faster. We also know that we don’t have all the answers on how to successfully navigate this next phase. It is helpful to have advisors who have done this before and can give us perspective.
So we decided that if we could find the right outside partner, it would help on all fronts.
What was appealing about Altamont Capital Partners?
Keith: That’s easy. They understood the brand the best and are committed to us keeping the brand authentic and true to its roots.
Scott Olivet (Operating Partner at Altamont Capital) has a long track record keeping brands core but growing at the same time. Scott’s team and the Altamont crew had the most applicable experience, they back our plan, and we like them.
In what areas do you think they can help the most?
Keith: The most important thing is an overall perspective on building the business with brand authenticity and longevity in mind. We also look forward to their help on setting up operations that can take us into the future.
But it is also just the little things – helping us avoid mistakes others have made or contributing an idea that helps us do something better or faster.
Is Altamont a minority partner or majority partner?
Keith: We aren’t commenting on the terms of the partnership – I don’t really think anyone cares about the details and I will respect the privacy of my co-owners.
All I will say is that the founders did not ‘cash out’ and we remain significant shareholders as well as the executive team running the business.
Will HUF keep its headquarters in Los Angeles and operate independently?
Keith: Yes – we will continue to be based in LA and the same team will continue to operate the business. We are hiring.
See Page 2 for more of our interview with Keith Hufnagel
Skate footwear is a tough market right now. What is HUF’s point of difference, and why is that a major focus for the brand going forward?
Keith: I’ve had a passion for shoes forever – I have always put a ton of thought into the design of my shoes as a rider and obviously once I got into the brand side of things.
And Jai, our CEO, is kind of a shoe genius. He came to HUF to build an amazing footwear program and the early models that he’s put out there seem to be really getting great reception. So we’re happy about that.
What we are trying to do is push skate footwear forward. We want to push the aesthetic boundaries of what’s possible in a skateboard shoe. Dylan’s shoe (team rider Dylan Rieder) is a great example of that. Jai and the team were able to really deliver on what Dylan wanted as a rider in terms of look but also performance.
Obviously you can ride it at the highest level but we are delivering on a look that is what he wanted. I think the classic line is also a new take on things that a lot of people seem to like.
And then there’s the shameless plug for my own model – I like the Hufnagel 2 – that’s my go-to. Our footwear plan is to keep making great skate shoes and keep doing our best to capture the really incredible style and attitude of our riders.
Do you have plans to get back into HUF retail? If so, why and when?
Keith: Yes, but not in the same multi-brand retail concept. It’s important for us to present the HUF brand the way we see it and to present the full product line that other retailers don’t have the space to carry.
Our first store will be on Fairfax in early 2015 and we are actively looking in New York. One of the benefits of the Altamont partnership is we can do this right and more comfortably than we could on our own.
How would you describe the state of the market right now?
Keith: It is competitive. We compete with other apparel and footwear brands but we also compete for dollars with the iPhone 6 and everything else.
I think the most authentic brands that create the best, most innovative product and who do it their way… with style… will do great. Everyone else will struggle.