 reported earnings yesterday and gave some important updates on the business. They ranged from consolidating operations, sales growth and if they'd ever sell in brick and mortar stores.){kind=link}
Grilla Grills new parent company American Outdoor Brands (AOB) reported earnings yesterday and gave some important updates on the business. They ranged from consolidating operations, sales growth and if they’d ever sell in brick and mortar stores.
Closed Operations in MI, TX, and OR
Grilla Grills was founded in Holland, MI, and we reported previously that AOB planned to consolidate Grilla Grills operations to Missouri from Holland, MI and Dallas, TX. That plan has now been completed.
While it makes sense from a financial and operational standpoint, it’s always sad to see a small business leave where they were founded.
On our last call, we announced that we would consolidate our Crimson Trace operations in Wilsonville, Oregon as well as our Grilla operations in Holland, Michigan, and Dallas, Texas, into our Missouri facility. I’m happy to report that we recently completed both of those consolidations right on schedule.
Brian Murphy, President, CEO & Director
As of mid-November, our assembly, warehousing and distribution functions for all of our brands are now being conducted entirely from our Columbia facility.
Andrew Fulmer, Executive VP, CFO & Treasurer
Sales Growth
Despite the overall slowdown in the outdoor cooking industry, Grilla Grills has since an increase in sales on the quarter year-over-year. Much of that has come from repeat customers.
I don’t know if we mentioned on this call previously, but Grilla even before the acquisition, sales generally were about 50% repeat customers
Brian Murphy, President, CEO & Director
The community building and high repeat customer rate is something that the Grilla Grills acquisition has taught AOB. They’re working on applying that across their other brands.
Brian Murphy also said that they saw “really impressive increases year-over-year” for Grill Grills on Black Friday and Cyber Monday. As a fully DTC brand, that’s inline with what other retailers like Ace Hardware had to say about their online sales for those days.
New Products
Previously AOB announced that they would have new products this fall, with a major launch in spring. They provided an update on that timeline.
Grilla, we’ve had a few products in development beginning really just before the acquisition, and I’d say that because we were looking for a brand to apply some of these innovations in some of this IP, and it worked out perfectly with Grilla. So you’ll see some of those innovations here in the next few quarters, probably the next quarter and then going into the second.
Brian Murphy, President, CEO & Director
What’s interesting about Brian Murphy’s statement is AOB was developing the new products even prior to the acquisition of Grilla Grills. They’re just applicable to that brand and added strategic value to the acquisition.
We’re not sure what the new products will be, but a guess would be an expansion of their outdoor kitchen line. That’s something that’s a differentiator for them and prominently featured in investor materials.
Cheaper Inbound Shipping Costs
While outbound freight is still expensive for AOB, they have seen relief on the inbound side.
I talked about before, and you probably have heard elsewhere, the container costs were up 4x or 5x what they — a couple of years ago. Now those are back down to normal.
Andrew Fulmer, Executive VP, CFO & Treasurer
Brick and Mortar
For a fully direct-to-consumer brand like Grilla Grills, there’s always the question about expansion into brick and mortar retail. While AOB was non-committal about this in the future, they did appear open to the idea, with the right retail partner.
I think ultimately, we want to do what’s best for the brand. We also want to honor the consumer. And if there’s a retail partner that is in alignment with those 2 things and we can offer value, then I think it’s something worth exploring, but we also have quite a bit of demand that’s built up through our direct-to-consumer channel, and so we don’t want to neglect that as well. So is it possible? Certainly. Is it something that we’ve talked about? Definitely. But we definitely want to be careful about that transition to make sure we’re doing what’s right for the brand.
Brian Murphy, President, CEO & Director