PROVO, Utah (BRAIN) — Shortly after Contour announced last week that it was returning to the market under new owners, Bicycle Retailer & Industry News spoke with the company’s new CEO Danny Lysenko and Adrian Montgomery of Verde PR, which is handling Contour’s communications, about the changes at the company, what its plans are in the U.S., and how it hopes to recapture market share in a category dominated by GoPro.
What follows below are some of the details discussed during a phone interview Friday. Answers were edited for length.
BRAIN: First off. Thanks for the quick reply to our request for an interview. Seems the first question to ask is, who are the new owners and why did they buy the brand?
Danny Lysenko: The assets of Contour were purchased by Clarke Capital Partners, a private equity company based in Utah. [Managing director] James Clarke has been a longtime investor. He invested in Contour a number of years ago. He always loved the product. He was always a passionate Contour fan and user. He was heartbroken when it closed. He said he believed in the product. He wanted to give it the rightful chance to succeed. At the end of October he bid on the assets [from receivership] and was successful. He had invested through one of the private equity funds that was part owner in the company previously. He had limited involvement in the past.
BRAIN: Is there any other investment aside from Clarke Capital?
Danny Lysenko: A few people have come in and done some investments. Some close friends of ours in the Eastern part of the U.S. Juan Pablo Montoya, one of biggest actions sports athletes in all of Latin America. He was really excited about the opportunity and invested money in Contour. A small group of friends and family wanted to be part of this.
BRAIN: What’s your background? How did you get involved with Contour?
Danny Lysenko: I was with Apple—their director of worldwide reseller operations. Before then I worked 8 years at Wal-Mart—handled everything from logistics to director of U.S. strategy team, and for 3.5 years led China operations. I hope to take my experience and help build Contour. The category is growing. We’re in the selfie generation. People want to take video of themselves and our product is perfectly positioned there. One of my best friends works with James Clarke and introduced the two of us. I knew of Contour and thought it would be great opportunity to be part of the rebirth of the company.
BRAIN: Why did Contour close its doors last August?
Danny Lysenko: To be quite candid, I don’t know all of the reasons. Part of it was their money situation—we are a much stronger company now, much better capitalized with the support of Clarke Capital and James and other investors. We have the best products on the market and now the resources to get behind it. Ultimately the company had funding issues. I think there were a lot of things that were wrong, from leadership to management to the board.
Now we’re really focused on the great opportunity ahead of us. We have a new management team. We’re not the old group. We’re passionate about the product. We love the space. We’re excited to bring the product back to customers. It’s striking to me how passionate people are about our products—customers who are so happy for us to be back; happy we’re giving the company a second chance.
BRAIN: Who’s part of the new management?
Danny Lysenko: We brought some people in from Utah. There are a couple of people that had associations with Contour in the past: Jason Green, one of the cofounders, joined us in technology. He’s focused on making cameras. We’ve got some people that have joined or will join in the next couple of weeks—big names in Utah. We’ve got Adrian on board with marketing. We have a plan and support from Clarke Capital and patience from them. We’re not in reactive mode but proactive.
BRAIN: What’s happened since Clarke Capital acquired the assets in October? It’s been five months since that transaction.
Danny Lysenko: We’ve been rebuilding the team, taking supply and selling through international distributors to keep product going. We’ve been working on building our playbook. We’re continuing to focus on development of products. We’ve been active behind the scenes. We were at CES (Consumer Electronics Show) and ISPO just to let people know that Contour was coming back.
BRAIN: Why move from Seattle to Provo, Utah?
Danny Lysenko: Because it’s where Clarke is based. But Utah is also a great place. It’s an outdoor mecca so a perfect backdrop for this product.
BRAIN: Were any of Contour’s old employees rehired?
Danny Lysenko: As mentioned before, Jason Green, one of the cofounders. Michelle Taylor, who heads finance. She was part of the old team and she moved down here to Utah. Scott Ketchum, head of sales, who had stepped away before the company closed. We’ve reached out to him and he’s been instrumental in helping us as we rebuild the distribution channels around the world.
Adrian Montgomery: Contour has rehired people that were instrumental in the prior organization. There were some people important to the history of the brand where it made sense to rehire. Having people that understood the missteps and what was great about Contour. The product was never the problem. It was always a high-rated product and well received. We want to keep that so having Jason [Green] on board is key.
BRAIN: GoPro is the dominant brand in the action sport camera segment. How do you plan to compete?
Danny Lysenko: By continuing to make the best products. I think back to my old company. Within weeks of running out of cash and going out of business, they refocused on making the best products, whether it was the best phone, with the iphone, or computers. We’ll continue making great cameras for our customers.
Adrian Montgomery: There’s nothing scary about having a brand in the marketplace that has as much market share as GoPro. When they’re investing that hard, the overall category continues to grow and there’s always room for other people in the space. One of the great things that can happen is an agile, nimble company such as Contour can move quickly into spaces not covered by a dominant brand….I really look at it as an opportunity. While they [GoPro] have a lot of market share now, that doesn't last forever. There’s room for other players. Contour’s fan base is strong with 186,000 fans on Facebook. The fans are passionate about why it’s different. Contour is different from GoPro. There is room for a brand that’s simple to use with an easy on/off audible noise, no having to look at camera and see if this is on, the bullet look is much better for cars, trucks, motorcycles, skiing, biking, anything with velocity.
Danny Lysenko: We don't’ think it will be easy. We have a great competitor. Really strong with great market share. They spend a lot on marketing. We understand we have an uphill battle. They’re dominant. But we feel we have a simply better product. If we continue to focus on doing great products and can run our playbook we’ll make a lot of customers happy.
BRAIN: What’s Contour’s sales distribution plan? Will you sell in multiple channels, that is to say, online, through big box and specialty?
Danny Lysenko: Contour had focused on specialty. We are looking at multichannel. Products are available on Contour.com now. We’re talking to multiple specialty retailers with large online presence and big box as well. We have a big plan for multichannel distribution.
BRAIN: Your announcement mentioned that key retailers have committed to the product line—who are we talking about?
Danny Lysenko: No one I want mentioned right now. There will be more information coming out soon on that. Worldwide I know in a lot of markets, especially outside of the U.S., distribution continues to be strong. We’ve maintained points of sale. That speaks a lot to the power of our distributors. In the U.S. we’re having to reestablish that but key retailers outside of the U.S. are still strong. I think it goes back to people love our product. The distributors were able to keep product moving over the last five or six months. Retailers continued to keep them on the shelf.
In the U.S., sales are direct. Right now with all retailers we’re direct. We’re looking at where it makes sense to go direct and use rep model. Those decisions are probably two to four weeks away. We’re currently talking to several different options right now. We’ll have more to tell in the next 30 days.
Adrian Montgomery: International distributors have re-signed with the company. They have demand in their regions and wanted to plug back in and retain the same points of sale internationally. In the U.S. distribution is not finished. There’s a lot of questions and any inquiries from specialty retail are welcome. There’s not a plan to say we’re going online only or big box. There’s always a great mix for brands like this.
BRAIN: Which international markets are strong for Contour?
Danny Lysenko: Germany, the Nordics, Australia, Japan and Great Britain.
BRAIN: Your announcement said you plan to debut new product soon. When can consumers and dealers expect to see the new intros?
Adrian Montgomery: They have built this product roadmap and literally the product is in development now. Some new stuff coming in 2014. It won’t be end of 2014.
Danny Lysenko: Bike will be a big focus.
Adrian Montgomery: We will market to bike enthusiasts, where those enthusiasts read and watch content. We will put the brand in front of that audience. I would say that there are probably four to five major segments we want to jump into right away. Bike is one of them. I would expect very shortly you’ll see some action in bike in terms of plugging into new brand ambassadors and putting the brand in front of that segment. That will be important.
But the [action camera] category as a whole is growing tremendously. This is not a static or idle category. It’s not like bike that has had the same unit and volume numbers in the last decade. If I had to compare to the bike market, we were constantly cannibalizing each other’s share. This pie is growing so fast, there’s plenty of slices for everyone that wants to come to the table. Demand for this product continues to grow in so many segments, not just outdoor, action sports and cycling. Just this look-at-me generation who want to document their life and share on Facebook, Twitter and Instagram. This category is not shrinking and has not reached its potential… I can guarantee you this is a place we can be very strong. It’s not a cycling-only camera. It’s great for water sports, power sports, outdoor, and there is so many things the outdoor crowd wants it for.