Major expansion for Smith Sports Optics
Bob Smith "was a frustrated powder skier because in powder you
work hard, you work up heat, and your goggles fog up. There wasnt a goggle on the
market which corrected the fogging, so he pulled out his dentistry tools and cut and
snipped and created the first thermal goggle."
Ken Frederick, company historian and vice president of
By PETER BOLTZ
Express Staff Writer
About 35 years ago, the size of Smith Sports Optics fit all in the head of
a San Rafael, Calif., dentist, Bob Smith.
Today, the company has outgrown its 13,500 square foot headquarters in
Ketchums industrial park and is completing a much larger building nearby to
accommodate an increase in sales, storage space and employees. The new 21,000-plus square
foot building is located across from Sun Valley Garden Center on Northwood Way.
Smiths president, Ned Post, said in an interview, "If we
couldve continued in our current building, we wouldve done it, but we needed
3,000 to 4,000 square feet to accommodate growth over the next three to five years.
"The addition of about 15 people comes in the customer service area,
the marketing area and some of the support groups like one or two people in finance and
one or two computer people."
Smith will use this space the same way it uses its current
spacetaking international and domestic orders for eyeglasses and goggles; designing
new styles of eyeglasses and goggles; researching competitors; and distributing two other
brand name sunglasses, Carrera and Action Optics.
Raw materials and manufacturing of components for goggles and sunglasses
are contracted out to various companies in the United States, Europe and the Far East,
according to a Smith financial summary. DFG Manufacturing in Clearfield, Utah, is the
exclusive assembler of all Smith goggles. DFG also assembles, warehouses and ships Smith
The increase in square footage is a modest reflection of Smiths
growth in sales. In the financial summary, Chief Financial Officer Ron Hayes reports that
sales have increased from $18.2 million in 1994 to $40.1 million in 1999. Over 80 percent
of the 1999 growth came from Smiths diversification into the sunglasses business.
With the non-prescription sunglass market worth over $2.8 billion,
according to the financial summary, Smith has room to expand.
Ken Frederick and Joe McNeal are two of Smiths informal historians.
Frederick is the companys vice president of sunglass operations and McNeal is the
director of product development. Frederick says he is "noted for trivia or what some
people around here call worthless trivia, but I know a lot about Smiths
history." McNeal is a historical source because his ski goggle tenure, first with
Scott USA and now with Smith, adds up to over 30 years.
Bob Smith "was a frustrated powder skier," said Frederick,
"because in powder you work hard, you work up heat, and your goggles fog up. There
wasnt a goggle on the market which corrected the fogging, so he pulled out his
dentistry tools and cut and snipped and created the first thermal goggle."
According to a timeline written by McNeal, Smith started hand building
goggles in his garage in 1966, and selling them on ski trips to Utah. In 1967, he struck a
deal with Klaus Obermeyer (maker of Obermeyer ski clothing) of Aspen to sell goggles
through Obermeyers sales force."
In 1969, according to the timeline, Smith started producing the
Original Smith goggle in Rifle, Colo., with a contract manufacturer.
Around 1971, Smith and Scott USA joined to develop and sell a Scott/Smith
goggle, but the deal fell apart sometime in 1974. By 1978, Scott USA closed its Ketchum
operation; and in March 1981, Scott went into bankruptcy, according to the timeline.
Smith and Chuck Ferries, the owner of PRE skis at the time, bought Scott
USA in 1981 from the bankruptcy court. "Then Smith and Scott were separate again and
competition heated up," according to Frederick. "The two companies together
probably controlled 70 percent of the U.S. goggle market.
"This," said Frederick, "takes us into the
mid-80s." Subsequently, he said, "Bob [Smith] sold controlling interest in
1991 to John Melin who ran a chain of fitness centers in California."
Frederick said that Melins contribution was to "initiate the
next phase of growth and look for diversification since Smith dominated the goggle market
which was flat. He was the one who came up with the concept of expanding the sunglass from
a ski accessory to a stand-alone sports accessory.
"His first five models made up the Smith Speed Collection: the Roval,
the Eddy, the Sliver, the Ambush and the Otis. Otis and Ambush are still with us.
"In 1993, Melin purchased Action Optics, which targets the 40- to
45-year-old customer and dominates the fly-fishing sunglass market," Frederick said.
Then, in 1996, according to Frederick, Melin sold Smith to the Italian
company Safilo S.p.A. (S.p.A. is the Italian equivalent of "incorporated").
"What Safilo offered us," he said, "was independence. They
allowed us to create our own product lines and the financial wherewithal to develop
Safilo S.p.A., was founded in 1934 by the Tabacchi family, and is located
in Padova, Italy, a little over 20 miles east of Venice.
Safilo bought 87 percent of Smith for approximately $22 million in March
of 1996. In 1997, it bought an additional block of Smith stock to bring its equity
interest to 95 percent.
Seventy percent of Safilo is privately owned by the Tabacchi family, while
30 percent of the company is publicly traded on the Milan stock exchange. The decision not
to sell on a U.S. stock exchange was a "management decision of Safilo," said
According to the companys 1999 annual report, net sales were nearly
$474 million, a 17 percent increase from 1998. Its Website reports that its well-known
collections such as Smith, Carrera, Gucci, Pierre Cardin and Christian Dior are
distributed through more than 120,000 outlets throughout the world.
As an offshoot of Smiths and Safilos vigorous growth is a
dispute with the dominant sunglass company in the United States, Oakley, Inc. based in
Foothill Ranch, Calif.
Business Wire reported on Nov. 15, 1999, that on the same date, Oakley
filed a lawsuit in U.S. District Court in California against Safilo America, Inc. and
Smith Sport Optics, Inc. alleging that certain sunglass models marketed under the Smith
brand name infringed on Oakleys XYZ Optics patents.
According to the Business Wire story, XYZ Optics technology "ensures
the optimal relationship between the lens geometry and the as-worn orientation to the
wearers eye. The result is reduced optical distortion at all angles of vision,
maximum peripheral vision" and protection from hazards.
Smith President Post says, "Were on the Oakley radar screen,
but were working to resolve our differences quite actively. Im the point guard
on this, and I think its fair to say were making progress. Weve settled
our differences before, and I think we will do so again."
As far as the future of Smith Sport Optics, Post says, "Clearly our
objective is to pursue a significant position in the global eyewear market and to continue
that management from Ketchum."