Sourcing & Logistics Case Study: Global Sourcing: Gander Moutain's Way

Less can be more when it comes to sourcing. This outdoor retailer is focused on closer relationships with a fewer number of apparel vendors.

As it expands its private label business, outdoor specialty retailer Gander Mountain is treading cautiously in the post-quota sourcing era, nurturing relationships with core supply partners instead of playing the field. With a focus on hunting, fishing, camping and boating, St. Paul, MN-based Gander Mountain offers outdoor equipment and accessories, apparel and footwear. Founded in 1960 as a catalog operation, the firm's scope has expanded to include almost 100 stores in 18 states. In addition to its own labels, the company sells national brands such as Columbia Sportswear, Woolrich, Pella, Carhartt and Wrangler.

Gander Mountain refers to its private label lines as "owned brands." In the apparel space, the retailer's owned brand is Guide Series. "Guide Series really represents who we are," says Robert Payne, vice president of global sourcing. "It looks like the outdoors, and a person can wear it in the outdoors, or with his feet on a railing in a chair on the deck. In sum, it's great for the backyard or the backwoods." Owned brands account for about 30 percent of Gander Mountain's apparel sales. "We plan to expand this a bit, maybe up to 40 percent, but we don't want to go much beyond that," says Payne.

Coping with changing trade laws
"Global sourcing is one of our key strategies to help us reach our financial goals," says Payne. The changing rules of trade, however, have created challenges. In particular, Payne points to the uncertainty caused by last year's safeguards and other big question marks about what is happening in China. He says the challenges associated with quotas have given him many sleepless nights. "The problem is that there are no answers out there," he says. "There are new rulings, new agreements and lots of gossip."

Gander Mountain mitigated its risks in 2005 by entering into relations with factories outside of China. Some of its new suppliers are in countries in Southeast Asia and Africa, as well as India. "We have also worked to establish a supply chain that moves product between Africa and India to our distribution centers here in North America," Payne adds.

Gander Mountain has relied heavily on reputable agents to help it find direct factory connections in these countries, he notes. "We also place a lot of reliance on the factory evaluations that we have studied. Part of this is making sure that these facilities adhere to our business code of ethics," he says.

Narrowing the vendor pool
Two years ago, Gander Mountain was out in the field working with a lot of factories. "And given that we are very popular on the retail side, we are still getting a lot of calls from factories wanting to do business with us," Payne says.

But Gander Mountain has more narrowly focused its global sourcing. Realizing the importance of establishing strategic relationships with a few select partners, the retailer has consolidated its business with fewer factories to make its business more meaningful to those suppliers. "We can make these decisions now because, having had relationships with these factories for a while, we have learned who does what well," says Payne. "These are the factories where we are placing our business, rather than bidding out programs to factories that turn out B-grade and C-grade products."

As it builds relationships with select factories and throws more business their way, Gander Mountain has found that communication is increasingly important. "Nothing replaces'face time,' " says Payne. To ensure enough face time with vendors, key Gander Mountain executives visit overseas factories quarterly. The retailer also arranges for factory managers to visit Gander Mountain's corporate headquarters twice annually to meet with buyers and others. "This improves the relationships between the factories and the buyers," he says.

Investigating new technologies
At this point, Gander Mountain is not heavily using technology to facilitate its global sourcing. "Our key technological advantage is having more'eyeballs' out there watching what is new and fresh, especially keeping track of this information on the Internet," says Payne. But the company is looking at technology to help it improve its product design and assembly processes, as well as back-and-forth communication with factories. "We realize that we have a great opportunity to make ourselves more efficient with the use of technology," he says.

For example, Gander Mountain is evaluating some product lifecycle management (PLM) systems. "This software will help us with design, such as providing specification consistency," he says. "It will also end up being a great communication tool with the factories." In terms of optimizing POS information, Gander Mountain's sourcing department relies largely on the merchandising division to tell it what is selling. "However, we also keep our own thumb on the pulse by running our own reports to see which categories are growing and which ones are shrinking, what colors are trending, etc.," Payne adds.

William Atkinson is a free-lance writer based in Cartersville, IL.