Orvis' Hot Rod

As the recession hits retailers, lifestyle brand Orvis is using its award-winning new Helios fly rod to fish for new customers—and reel old ones back in

By Charles DuBow

Orvis

Standing thigh-deep in Vermont's Battenkill River, tying a nymph onto the leader of his fishing rod and wearing a beat-up green cap with a feather sticking out of it, Leigh "Perk" Perkins Jr. doesn't look much like a CEO. The tanned, sinewy, 56-year-old looks more like a fly-fishing bum, and the grace and accuracy with which he casts his line indicates the many years he has spent on the water. But he is in fact the chief executive of Orvis, one of America's biggest lifestyle companies—and today's damaged economy isn't very good for lifestyle companies.

"Sure, I'm worried," he confesses as he wades carefully through the cold, rushing water. There was a big storm the night before and the river is higher and faster than normal. Unseen rocks loom underfoot and a misplaced step could easily knock one over. "Our sales in many of our strongest divisions are really hurting. Our pets division is way down for this year—and that's been one of our strongest earners for years. I guess when times get tough, people don't spend as much on their dogs as they used to," he says with a small laugh.

Women's apparel, another recent big earner, has also come down with a thud. So have the company's travel-related services as their traditional well-heeled private and corporate customers hold off on taking $8,000 fishing trips to Tierra del Fuego or $30,000 African train safaris.

But the rod in Perkins' hand gives him reason to celebrate. It's the handmade $775 ZG Helios, the lightest, strongest and most flexible fly-fishing rod Orvis has ever produced. And it's been a big hit for the company. "We've sold a ton of the Helios," Perkins says proudly. "It's 300% over our initial sales targets."

Reel Success

Perkins understands that the sale of a fishing rod, even a $775 rod that has won universal praise from fishermen, isn't going to have a significant impact on Orvis' bottom line. He does, however, appreciate the psychological importance of the rod's success. "There are a lot of people at Orvis who are really proud of the Helios," he says. "We're first and foremost a rodmaker, and even though we are more of a lifestyle brand now it's great that people still recognize us for that."

The success of the 152-year-old Orvis brand is very personal to Perkins. Founded by Charles Orvis in 1856 in Manchester, Vt., as a tackle shop for visiting fishermen, the company was acquired by Perkins' father, Leigh Sr., in 1965 for $400,000. At the time the company enjoyed a solid reputation among the fishing world's cognoscenti as a maker of fine rods, but it was far from the retail giant it is today. Since taking over as CEO in 1992—Perk's younger brother Dave serves as the company's executive vice-president—Perkins is said to have tripled the privately held company's annual revenue to more than $320 million. Not bad for a small company that is still based in Manchester, where most of the employees are as at home with a fly rod or shotgun as they are with a Power Point presentation.

Of course, Orvis' revenues are small when compared with larger companies in the premium retail category, notably Polo Ralph Lauren (RL) which announced sales of $4.8 billion for its 2008 fiscal year, and Abercrombie & Fitch's (ANF) $3.7 billion. Perkins knows he could have grown Orvis more but he believes that it is important for the company to hold true to itself. He points to other brands that have grown at the expense of their brand and how they lost their way as a result. "We've actually cut some products that were successful that we felt didn't fit our image," he says. "We won't just sell things that don't make sense for our brand."