Outdoor marketplace Out&Back is acquiring the outdoor equipment company The Locals Sale — and through this purchase is expanding to hard goods items.
Starting today, shoppers can buy over 2,500 hard goods products like pairs of skis, snowboards and boots on Out&Back’s platform. Barruch Ben-Zekry, founder and CEO of Out&Back, declined to share the cost of the acquisition but said it was primarily an all-cash deal and there were “millions of dollars” in resale value that came with the acquisition. The Locals Sale founder Jake Cohn is also joining Out&Back as director of winter sports, business development & events.
Out&Back, which is backed by VF Corp and Dick’s Sporting Goods, specializes in new and used outdoor products, but a large portion of its inventory had been soft goods like jackets, hoodies and hiking or climbing pants. Out&Back has been attempting to expand to the hard goods category since last year. Its acquisition of The Locals Sale helps Out&Back gain access to more inventory and bolster its position in the outdoor gear category. Out&Back’s business has seen a 10 to 15 times growth this year compared to last year, thanks to the increased number of hard goods products that it brought onto its site.
“The Locals Sale had a really unique positioning in the marketplace,” Ben-Zekry said. “They were really a leader in pulling forward top quality skis and snowboards in particular, so hard goods in the winter category.”
Founded in Denver, Colorado back in 2019, Out&Back has between 2,000 to 3,000 SKUs at any given time. The company mainly operates online but it has been experimenting with pop-ups more recently. The Locals Sale and Out&Back had already co-hosted in-person ski and snowboard gear pop-ups in Salt Lake City, Utah and Boulder, Colorado back in October. The company has received an undisclosed amount of funding from top retailers like The North Face owner VF Corp and DSG Ventures, Dick’s Sporting Goods’ in-house investment fund.
The Locals Sales’ online store, on the other hand, was launched in 2020 by a former pro skier. The Locals Sales offers new and used ski and snowboard equipment as well as outdoor clothing from pro athletes and brands. It also frequently hosts pop-up events in Salt Lake City and Boulder, Colorado.
Ben-Zekry said the company is bullish on the growth that the hard goods category can bring to the business. He said that, in the re-commerce space, people are more willing to purchase secondhand products that they don’t have to wear.
“From a re-commerce perspective, the further away it is from your skin, the more likely it is that somebody will be okay to purchase that item,” Ben-Zekry said. “There’s a lot of secondhand outerwear in the world that we can be a great channel for and it’s still the most significant part of our business right now. But hard goods is where there’s a tremendous amount of expansion.”
One of Out&Back’s early attempts to expand in the hard goods category was in April last year when it teamed up with Dick’s Sporting Goods and Public Lands for an in-store buy-back program. In select markets, Dick’s Sporting Goods and Public Lands accepted unwanted hard-goods in store.
The majority of The Locals Sale inventory has now been consolidated into Out&Back’s space in Denver. Out&Back also customized its warehouse to be more efficient in holding hard goods, which includes adding a specialty racking system.
Kassi Socha, director analyst at research firm Gartner, said that growth through acquisition can be a much more efficient method of entering a new category. Otherwise, companies would have to hire new talent, acquire their own inventory and build relationships with their own suppliers to expand their assortment.
“Oftentimes companies acquire other companies to expand into new verticals or categories. They haven’t previously been in and they do it as a faster route to market,” Socha said. “Together, two is better than one. The forces are greater when the companies merge together.”
However, merging operations is by no means easy. Socha said that the brands involved could have two different work cultures. Brands might also have to fire employees in duplicative roles.
Out&Back retained The Locals Sale’s operations staff due to their expertise in assessing the quality and condition of hard goods items. Out&Back’s Ben-Zekry said that The Locals Sale’s website will continue to stay live “for the time being.”
“We’ve obviously spent a tremendous amount of time trying to align to the organizations, The Locals Sale and Out&Back,” Ben-Zekry said. “We’re also now making plans in the near term to think about what comes next for Out&Back’s expansion.”