Jack TenneyExtra Point

by Jack Tenney, Publisher

November 2005

All Business is Local

Global schmobal. Like politics, all business is local.

That being said, it’s clear that business people have to understand what’s going on in the world in order to make their little economic engines purr.

I was in the ski industry in the late ’70s when the hardgoods side of the biz was dominated by European brands. Rossignol, the French ski maker, came to Williston to take advantage of the weak dollar and the vast northern North American market. Dolomite, the Italian boot maker, came to Essex Junction for the same reason and the advantageous labor situation -relatively good work ethic, loose labor regulations and low wage rates. Salomon, the German wunderfolkens, started their U.S. subsidiary touting Mercedes-Benz - or was it Porsche? - engineering and leather coats. I never quite understood that whole marketing gig but, what the hey, I worked out of Barrecrafters’ world-headquarters in tiny Shelburne, Vt. From my spacious corner office (10-by-10), I looked out on the beauty of Lake Champlain with a foreground of a flashing yellow traffic light on Route 7 and a weed field where a big yellow tabby hunted field mice.

So when I think about outsourcing manufacturing jobs to India, I empathize with the long-established Indian entrepreneurs suddenly faced with the prospect of losing key employees to new foreign-owned operations setting up down the street. No matter how governmental economic development efforts are organized, a lot more attention and favor are paid to the new guys than the old guys or to the international stars than the local players. It’s natural, wouldn’t you say?

So, what else is new? Opportunity is opportunity.

My best learned lesson from my 10 years in the international trading pit of ski gear commodities came while visiting the owner of one of the largest independent ski shops in the country. He and his brother were the bulls of greater Detroit, Mich., ski equipment retailing, not exactly the Garden of Eden where only peaches grew. Herman’s, backed with capital from the Grace conglomerate, had captured the East and was expanding into the heartland. Denver and Salt Lake were huge markets. Minneapolis was the last full retail-priced ski market in the country. A cartel called the Big Five had locked up the West Coast. Texas was weird; Houston had the world’s largest ski club, which rolled out fleets of 747s to take its members wherever the powder was deep and the slopes steep.

How, I wondered, did an independent local retailer maintain such a consistent record of achievement and influence? No factory or distributor in the ski industry overlooked these guys, even though their percentage of the retail ring didn’t measure up to the so-called biggies. I was determined to find out.

When I entered the suburban Detroit office located in the back of the shop of the outfit’s original store, I was struck by how much it looked like mine. It was small, messy and served good coffee. We did the usual chit-chat, mostly between the man and my sales rep. When it came time for me to stick an oar in, I asked him what he was doing. He had a pile of tear sheets on his desk that he was comparing to a seven-column accounting pad filled with his hand-written data.

“I got a clipping service so I can follow ski promotions all over the country. I like us to be a week ahead or no worse than tied from Labor Day right up to Christmas.”

“What happens after that?” I asked.

“I let everyone go skiing, then.”