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Originally published September 11, 2008 at 12:00 AM | Page modified September 11, 2008 at 12:33 PM

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K2 Sports optimistic about upcoming winter

K2 Sports is optimistic about the upcoming winter season even before the season's first snowfall. The Seattle ski-, snowboard- and outdoor-equipment...

Seattle Times business reporter

K2 Sports is optimistic about the upcoming winter season even before the season's first snowfall.

The Seattle ski-, snowboard- and outdoor-equipment maker's warehouse, which is about a quarter-mile long, is packed to the ceiling. "This year we have introduced interesting innovations again," said Tim Petrick, K2's vice president of global sales. "And we hope that the snow will be as great as last season."

The U.S. snow-sports industry had its best year ever last year. According to Snow Sports Industries America (SIA), a national trade association, the number of skier visits in the U.S. reached a record 60.1 million, up from 55.1 million in 2006-07. And consumers spent a record $1.9 billion at snow-sport specialty stores.

"We are very satisfied with what we made out of the market conditions and hope, of course, that they will stay this way," Petrick said.

SIA President David Ingemie is more cautious.

"It's true that winter sports are done by people who have the money for it," Ingemie said. "Also, many skiers or snowboarders are very much into their hobby, so they'd rather travel with five people in one car than not go on winter sports vacation at all.

"Skiing and snowboarding is an economy-resistant business, but it's not economy-proof. I would expect that the current results for the snow-sports industry will be slightly less positive in the coming season, unless it's a record snow year."

Heavy competition

K2 is thinking about more than getting enough snow this year. The company also wants to increase its market share with product improvements, Petrick said, as it competes with companies such as Rossignol, Salomon and Burton.

"Having the right idea at the right time is tremendously important," Petrick said.

This year K2 introduced a new binding for snowboards called "The Contraband," which weighs 20 percent less than the old bindings and is easier to open and close.

A good idea is how K2 got started. The company was founded in 1967 by Bill Kirschner on Vashon Island. He used to make splinters and animal cages. In 1961, he invented the fiberglass ski. It sold so well that he went on to found K2 — named for Kirschner and his brother, Don, as well as the name of the world's second-highest mountain.

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Since then, the company has grown into a global leader in snow sports and outdoor equipment. Today, K2 makes products in more than 40 categories, including ski poles, helmets and apparel. There are also K2 bikes, ice skates, socks and sun-care products made under licensing agreements.

In 1993, the company hit it big again: It introduced the first inline skates with soft boots instead of the stiff plastic hockey-style designs that dominated the market. In August 2007, Jarden Corp. bought K2. Jarden trades on the New York Stock Exchange, but it does not break out financial results for K2. In 2007, it reported $4.7 billion in revenue and $566 million in profit. K2 has 240 employees, including 52 who design and develop products.

Jarden also owns other brands, including Mr. Coffee, Sunbeam and Crock-Pot. K2 falls under Jarden's outdoor solutions segment, along with Coleman (camping equipment), Shakespeare (fishing equipment) and Volkl (ski equipment).

Charles Strauzer, an analyst at the broker dealer CJS-Securities, said K2 is a good fit for Jarden. K2 has taken advantage of being part of a larger company, such as introducing ski poles made with the same technology as Shakespeare fishing poles.

Move from Vashon

K2 moved to a 310,000-square-foot headquarters in Seattle's Sodo District from Vashon Island last year.

"We had simply outgrown the old location," Petrick said. Now, we are much more accessible to employees, customers and vendors. For the first time in our history, all operations are under one roof."

K2's production remains in China, though. The company began outsourcing it in the 1990s. K2's products are made near Hong Kong in a factory with about 5,000 workers. "But they also work for other Jarden brands," Petrick said.

He said the move should also be considered a statement of K2 that it wants to stay in the Seattle area. "It's a great place to be for a company like us, especially because there's snow all year around so we can test our products. Many of our employees are themselves dedicated skiers and snowboarders."

"For many customers design and brand are the most important argument to buy a product," Anthony DeRocco said, the company's vice president of global product development

K2 has developed 15 brands targeted to better reach certain consumer groups, such as teenagers or children. For snowboards, for example, the company offers K2, Ride, Morrow and 5150.

"Take K2 and Ride: While the first brand is more inclusive and directed toward all ages. The second is more exclusive, for younger people, more aggressively designed and a bit pricier," DeRocco said.

Other examples for branding at the company are skis (K2, Line, Madshus, Karhu) and snowshoes (Tubbs, Powder Ridge, Little Bear).

DeRocco said he is especially curious about how innovations like "The Contraband," for Ride snowboards, will sell. "But of course, our primary concern, as every year, is that it snows — much and long. Trust me, everyone here is hoping for it."

Georg Kern: 206-464-3283 or gkern@seattletimes.com

Copyright © 2008 The Seattle Times Company

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