In 2018, Jimmy Funkhouser, owner of Denver specialty outdoor retailer Feral, was lamenting the state of the outdoor industry and what he calls its rampant elitism.
The best solution he could come up with: Start selling used gear.
“The reason we started buying and selling used gear was simple. Outdoor gear is too expensive,” Funkhouser said. “We were trying to figure out anything we could do to drive the price down.”
It also helps that the margins on selling used gear are much better than new because brands control the price of new products.
“We realized we needed to create a secondary marketplace that allows us to wrestle price away from the brands and drive prices down for the customer,” he said. “It’s a good business for us and a great business for our customer.”
The Daily visited Funkhouser’s store in the hip Tennyson neighborhood of northwest Denver to discuss how business is going, what’s selling, and future trends.
Feral’s Steady Business Growth
According to Funkhouser, the post-pandemic hangover across the outdoor industry hasn’t slowed them down much.
Feral owner Jimmy Funkhouser. Photo by The Daily.
Feral has grown 50% year-over-year for the past seven years, he said. During the COVID-19 outbreak, the store was forced to close but the “second we opened it was insane. The 90 days after we reopened was the largest lift in year-over-year sales we’ve ever seen.”
Funkhouser sees the past two years as “artificial growth,” and where a lot of companies may have thought this was the new normal and overspent on inventory and staffing, Feral did not take that approach.
“We’re still in a growth phase, so we’re growing inventory year-over-year, but we didn’t take that COVID period as a signal that we needed to do anything crazy,” he said.
Feral is also taking advantage of the brands that are bloated and are offering fire sales of 20%-30% off wholesale prices.
The business relies almost solely on foot traffic to its brick-and-mortar locations. E-commerce is only about 2% of its overall sales.
Future Plans
As of now, Feral has only two locations, with the additional store in Idaho Springs, Colorado. Funkhouser also plans to expand to Michigan and open a store in Grand Rapids.
But he doesn’t want to grow too much, too fast. Feral, which started in 2016, keeps a carefully curated running list of what brands are available on its website.
The used gear resale model is difficult to scale and do it right, he said, which is why a lot of the larger retail brands aren’t focusing on it.
Feral’s storefront on Tennyson Street, in Denver, Colorado. Photo by The Daily.
“It’s easy for us to be surgical about the used gear buying process when we have two stores,” Funkhouser said. “But 400 stores?”
Funkhouser plans to open the third location in Grand Rapids by the end of this year or the beginning of the next.
Why Michigan? First, he’s originally from the Midwest – Indiana – and second, Funkhouser sees a business need.
“There’s a not a single outdoor gear shop in the entire state of Michigan that buys and sells used gear at scale,” he said.
Others have tried and not succeeded, primarily because they don’t have access to inventory, according to Funkhouser. He plans to use the Colorado stores to help divert stock to Michigan.
For the last six months the store has been siphoning off a small portion of their used inventory to prepare for that store’s opening.
To make sure the same quality and consistency of gear is being acquired, Funkhouser will spend time going back and forth from Colorado to Michigan.
After Grand Rapids, Feral doesn’t have any immediate plans to open more stores. While there is no limit to how many stores his company could open, Funkhouser worries about losing efficiency and consistency.
“There’s definitely a point of diminishing returns,” he said.
New Brand Strategy
Feral has pinpointed two types of brands it likes to carry in its new merchandise section: Small-batch, high-quality brands, and heritage brands that have rich stories that resonate with people.
The store is trying to grow its business by selling those brands that differentiate Feral from the larger players.
For example, Feral features merchandise from Topo Designs, Gossamer Gear, and Hyperlite.
Both with the smaller brands and with the heritage brands, Feral is looking for a story.
Goodr sunglasses at Feral. Photo by The Daily.
For instance, the store carries Stanley’s water bottles, cups, and thermoses.
“A lot of people resonate with Stanley because their grandfather had the same thermos,” Funkhouser said.
Another brand that has been selling well includes the affordable polarized sunglasses brand Goodr.
Feral has carried Goodr for about three years now, and Funkhouser said he hasn’t seen a brand with as much “sustained, insane demand for the first three years.”
Typically, a brand will have a season where it’s hot then it craters or peters out.
But with Goodr, customers like the style and the price point – $25-$35 – which means customers can replace their sunglasses as often as once a month.
“I’ve never seen a new brand sustain its interest and nobody else has been able to come in and beat them,” Funkhouser said.
Another brand with a story that resonates with local customers is Belong Designs, a small apparel company local to Denver.
“This crushes,” Funkhouser said. “You can’t get it anywhere else in town. People love the story. You go to a bar and people say, ‘where’d you get that?’ And you say ‘I got it at Feral. It’s a local brand.’”
In-house Brand
Feral both white labels merchandise and produces some goods.
It white labels products such as hammocks, clothing, some hats, and water bottles, meaning it buys products from another company then rebrands them as their own.
Feral merchandise. Photo by The Daily.
But it also has an in-house designer who designs patches that can be sewn on white-labeled hats, for example.
The business is also in the process of crunching the numbers to decide on producing more in-house products at scale.
“Our goal is to be as good or better than anything else in the category while maintaining strong margin,” Funkhouser said.
Bart Schaneman can be reached at bart@ordaily.outdoorretailer.com.
