Profiles in Business: Leigh H ‘Perk’ Perkins, Jr and The Orvis Company
The first thing that greets you when you enter the Orvis Company’s 23,000-squarefoot lodge-like flagship store in Manchester Center is a huge, liquid-eyed, horned, fake bison’s head mounted on the wall. Between that, all the fieldstone and hunter’s green, the buttery men’s leather jackets, the $9,000 hunting rifles, the reels and fly rods, the elegant canoes, the bronzed animal statuettes, the actual trout pond in the rear of the store – stocked with actual trout the large variety of hunting and fishing photos on the wall, plus the motto, “We provide our customers with products, knowledge, experience and services that define and support the distinctive country lifestyle,” you might expect Orvis’s owner and CEO, Leigh H. Perkins, Jr, to be an eight-foot tall Hemingway clone who rides into interviews on a moose.
Instead, Perkins, universally known as “Perk,” turns out to be a fine-boned, small, handsome, casual, thoughtful and friendly man who looks much younger than his 51 years and enjoys telling funny stories – many of them on himself.
We meet not at the store, or the at fishing rod factory behind it, or at the American Museum of Fly Fishing next door, or at either of Orvis’s two Manchester outlet stores. Instead, we meet at Orvis’s five-year-old, $7 million, 53,100-square-foot headquarters down the road in Sunderland. Overlooking a pond, the building sits on 330 acres, 25 of which are permanently protected through conservation. With its high ceilings and open, airy floor plan, the building is, once again, designed to look more like a hunting lodge than an office complex.
This is because the great outdoors is not only Orvis’s raison d’etre but also it’s bailiwick. The company was founded in Manchester in 1856 by Charles F. Orvis to sell his high-quality, hand-made fly-fishing equipment. In 1874, Orvis developed and introduced the ventilated fly reel, still the prototype for modern fly reels. The company he started is now the oldest fishing rod manufacturer in the world, and its catalog business has been operating for over a century.
“There have been three families that have run Orvis since 1856,” Perkins told me. “The Orvis family ran it for two generations. Then in 1939, a fellow named ‘Duckie’ Corkran took it over. He had no children and developed no heirs in the business. So when he got into his 70s, he sold it to my father. That was in 1965. My father ran it until 1992. When he retired, I took his position and my brother took a vice-president’s position. Most people here would probably describe Orvis as a family business.”
Orvis remains a privately-held company today. Perkins and his brother, David, 48, a company vice-president and the head of the “sporting, traditions” division, own equal shares; their two sisters, who do not work in the business, also own shares.
Since Leigh H. Perkins, Sr. retired in 1992 and Perkins took over, Orvis has grown from having $88 million in sales a year to $250 million. As a catalog company, Orvis pre-dates Sears. It mails over 50 million catalogs annually. It also operates about 30 retail stores in the United States and the United Kingdom. It has about six outlet stores. It serves an international market with a network of over 650 dealers in North and South America, Asia, Europe, Africa and Australia. Its award-winning Web site (orvis.com), launched in 1998, saw a 400 percent increase in sales during its first year of operation. The company employs approximately 2,000 people during its peak (pre-holiday) season. Although Orvis is known for its upscale outdoors gear, by the 1980s the company had decided to diversify. It shifted its image to “country living” and now sells men’s and women’s clothing, gifts and woodsy-hued furniture as well as rifles and rods.
Perkins himself is defined by his great love of the outdoors. As a boy, he went all over the world on hunting and fishing trips with his father. Hanging next to the receptionist’s desk, for example, is a 1963 photo taken of Perkins, age 10, standing next to – and being dwarfed by – the enormous, 183-pound Nile Perch he has just caught.
Perkins is an accomplished fly fisherman, wingshooter, canoeist, cross-country skier and bird watcher. He serves as the vice president of the board of the Nature Conservancy. He is involved in many conservation issues across the country, and he donates 5 percent of Orvis’s pre-tax profits every year to conservation causes.
A friend of Perkins, Joe Miles of RK Miles, Inc, a building materials supplier in Manchester, talks enthusiastically about going on fishing trips with him.
“He’s a great teacher when it comes to fishing and the natural world,” Miles said. “It’s wonderful to float down a river with Perk and have the benefit of his humor and knowledge of the surrounding, area, and what’s going on under the water, and in the trees with the birds, and what’s growing on the ground. And he always has great stories from his personal life about every location.”
When we meet, Perkins is dressed casually in tweedy pants and a dark blue sample shirt from Orvis. His vest, he admits with a laugh, comes from one of his catalog competitors, Eddie Bauer.
In terms of risk and creativity, Perkins said he does not think of himself as an entrepreneur.
“I inherited something, so I did more. enhancing than creating,” he said. “But I created a big chunk of culture here. On the risk side, I have trouble with the word ‘risk.’ We take a risk when we sign a 10-year lease on a property in New-York City. But it’s not a risk, really. You get all the data, look at the price-per-foot on the rent. Everything is pretty quantifiable, and if it was really that much of a risk, you wouldn’t do it. But when you take someone from Vermont and ask them to manage a store in New York because we want it to feel like Vermont when customers go in there, that’s a risk.”
Perkins has always had the nickname Perk.
“My parents called me that ever since I could remember,” he said. “I’ve kept it
because I like it. Also, it helps identify cold-callers who ask for ‘Leigh’.” Perkins, Sr came from the Midwestern steel industry. First, he was involved in a mining company, and then he worked his way up through sales at a welding company in Cleveland, OH.
“But he loved mail order, and he loved fishing, and he had been a customer of Orvis for a long time,” Perkins said. “He saw that the owner was quite old and figured there was a chance he might acquire the company from him. He persisted, and it took him two years to consummate the deal.”
About the time Perkins, Sr bought Orvis, he and his wife were divorced and their sons were put in boarding schools. At the time, Perkins was in the ninth grade. His school was in Connecticut, although he continued to spend time with his mother in Ohio, he also begin hanging out in Vermont with his father.
“When I would come up in the summer, every single weekend we would take off camping and fishing,” Perkins said. “He’d pile us siblings into the car, throw in groceries, pick up a steak going out of town, and off we’d go to a different part of the state to camp and fish. And almost every vacation, he was off exploring the fly fishing in some part of the world or the country. He was checking out new markets and new destinations, and he’d take us along.”
The Perkins children traveled to Belize, Iceland, Alaska, Chile, Mexico, Canada, Argentine, and all over the Rocky Mountain states. “It was pretty cool,’ Perkins said.
Perkins’s first job, at 16, was working in an arboretum in Ohio. There he learned an important lesson.
“I didn’t have a boss,” he said. “I’d show up and they’d give me clippers and say go trim this or that. I hated the job. It was a dream-come-true job, I was outdoors, working in beautiful environments – what better job could a kid have who likes to be outdoors? But I didnt have a mentor. And that’s so important for anyone’s development of enthusiasm or passion or just skiffs, to have someone who takes in interest in him.”
Perkins began to spend his summers working for Orvis. There he found mentors and began learning about business.
“The biggest part of business is working with people,” Perkins said. “People skills are what you get from your parents, growing up. My father has great skills with people, and I think I inherited some of those skills. And I probably developed some on my own. As far as the nuts and bolts of making smart decisions, I think I learned a lot of that just from being around my dad. He would look at things objectively. That was his style. He would have passions and run with them, but he would also weigh the pluses and the minuses and the risks involved. And he used to give me his commandments’.”
Some of the elder Perkins’ commandments: “Well, I learned it again today. You can’t make a friend out of an enemy.” Or, “Once a bad vendor, always a bad vendor.”
“After 25 years in the business, I know he was usually right,” Perkins said.
Because of the Perkins family’s considerable holdings, the elder Perkins eased his children gradually into the world of investments. He held yearly meetings with an investment advisor, for example. And he occasionally gave them enough rope to hang themselves. At 22, for example, Perkins was invited to invest in what he thought was “a great deal.” His father knew differently, but let him do it anyway.
“I lost $2,000 on that investment in a month,” Perkins said. “I certainly learn a lot more indelibly from my mistakes than my successes, and my father let me learn that way.”
After graduating from Williams College in 1975, Perkins spent two years driving a Jeep around the world.
“That was great fun,” he said. “I don’t know when I’ll get to do it again.”
Then it came time to choose a career. Perkins was torn between conservation law and Orvis.
“My father said to me one day, ‘You know, you can be just as effective as a businessman supporting conservation causes and serving on boards as you can be practicing within conservation,” Perkins said. “It was easy to take his word for it, because I was looking at a couple of years of law school, working my way up from the bottom rung of a law firm, developing some skills, then working my way up in a conservation company. It was that or being, the product of nepotism and accelerating through management.”
At the time Perkins joined the family company, it had only one store – in Vermont. One of his first creative ideas was to open a second stoke in San Francisco and extend the brand’s recognition to the West Coast. His father backed him.
“I didn’t know the first thing about running a retail store,” Perkins said. “I’d been a copywriter here, writing copy for
the catalog, and Id handled some wholesale sales for us, but I knew nothing. But he gave it to me. I had no mentor out there. I had to figure it out on my own. That was a huge risk on my father’s part. Not only a risk to the business, but to me as his son. Had I failed, it could have been pretty damaging to my confidence. There wasn’t much a of a safety net under me. But I learned a lot.”
The store was a success.
“The first January after Christmas, I
lost $20,000 in that store,” Perkins said. “I thought the earth had come to an end. I felt so bad. I had hired a bunch of Christmas help for the season, and what I learned is that on Christmas Day, you have to say, ‘Sorry, we don’t need your services anymore.’ I tried hanging on to them and lost $20,000, and I thought I’d sunk the company. But basically, after that, I was able to keep the store breaking even or making money in the big months.” After a few years of enjoying retail and life in San Francisco, Perkins hired someone to run the store, moved back to Vermont, and began learning the company from the ground up.
The Orvis Company is divided into divisions, or “channels”: Internet, catalog, retail, wholesale and sporting traditions, which handles the company’s fishing schools, travel business, and an endorsement and licensing program for about 2,000 fishing guides, sporting-dog breeders, etc.; these sportsmen pay Orvis an endorsement fee which is used to cover the costs of promoting them.
“Where we benefit is that these guys are using our equipment, and hopefully that’s rubbing off on their clients and influencing their future purchases,” Perkins said.
According to Perkins, Orvis has no target customers.
“Take fly fishing,” Perkins said. “We absolutely have the chairmen of big companies using our fly-fishing gear. But we have a lot of people who are truck drivers and blue-collar workers who also use our gear. For us to say one is our target customer would be more of a lie than the truth. It would cause us to ignore the chairman or the truck driver. We describe our target customer more as a person who is interested in country living.”
Orvis’s customers might say that the company’s chief competitor is LL Bean, but not Perkins.
“Each channel manager has a different competitor, and I’m not sure any of them
will say LL Bean,” Perkins said. “The fly fishing people would say that the Sage
Rod Company in Washington is our biggest competitor. The female apparel
people would say J Jill. Gifts & Home would say Plow & Hearth. They’d all have
different competitors.” About 18 years ago, the company moved away from being
only an outdoors outfitter.
“By about 1970, we were at least 90 percent fly fishing in our sales,” Perkins said. “By 1980, we were about 30 percent fly fishing, and we’re still at that now. Even though the fishing business was growing, the men’s and women’s apparel and home gift business was growing at a faster rate. There’s a little hunting in there, too, but it’s basically fly fishing. When my father bought the business it was doing about a half-million dollars in fly fishing sales. This year it will do about $40 million.”
The company manufactures little of what it sells. The rods are made in
Manchester. A footwear factory in Missouri turns out a very old style of handmade boot for a small but devout following. The fly wheels are made in England, but Orvis is in the process of outsourcing the manufacture to Asia.
“We outsource everything else,” Perkins said. “Over the last five years we’ve shrunk our vendor base a lot. We used to have literally thousands, and now we’ve got that down to hundreds. We’ve consolidated and gone to bigger vendors where we can be a bigger customer. It also gives us more time to spend on quality control.”
Orvis may buy from around the world, but it spends $2 million annually in Vermont,.Perkins said. The money goes to professional services like insurance, to store fixtures, and to the purchase of some clothing products. Also, in the past five years the company has spent about $16 million on capital improvements. Perkins figures that about half that money went to Vermont service providers.
The company picks its products about a year in advance, meeting with vendors who work with designers around the world.
“We can bring to the table what’s true to our brand, but they can bring to the table what’s exciting, what’s new and what’s going on,” Perkins said.
Orders are placed five months before every season.
“We get calls from people who say, ‘How could you run out of this?'” Perkins said. “I could say, ‘But we placed the order
five months ago. We had no idea. ‘Instead I say, ‘We really made a big mistake and we’re going to do better next time.”
Orvis has about 15 stores in England. There, sales come primarily from clothing.
The whole appeal over there is that we’re American,” Perkins said. “Where else are you going to get American stuff over there? It’s a small market, but we get really good responses.”
Orvis also wholesales to distributors in 25 countries, with Japan being its biggest customer.
The company produces and sends out about 26 catalogs a year which drive the Internet sales, Perkins said.
“People getting the catalog and then go to the Web site to order or to search for sales and deals,” he said. “We now look at the catalog as the advertisement for the Internet.”
It is a little-known fact that catalog companies exchange subscriber lists in order to extend their customer bases.
“Say, we would exchange names with Garnett Hill – we’ll send you 10,000 of our names to use once, and you send us 10,000 names to use once,” Perkins said. “And we code those catalogs as Garnett Hill names. If you ordered from there, we would ask for the code on the back. Then we would say, ‘Well, that worked pretty well,’ and we’d go back next year and do it again. And hopefully our names would have worked for them and they’d do it.”
Not every move to extend the base is successful. A few years ago, for example, Orvis bought Redington, a fly fishing rod company that sold good rods at an economic price. The purchase, Perkins said, was a defensive strategy.
“We saw Orvis as sort of a premium brand, and therefore we’re selling to the top of the pyramid,” Perkins said. “There’s a huge base to this pyramid that we’re not selling to. A lot of companies are entering there and developing into quite goodsized companies. Soon they’re chipping away at us. We used Redington as our defense to the base of the period. But one and one didn’t make three, because the cultures didn’t get along that well. We were always doing dumb things to them and they were doing dumb things to us
and it didn’t work.”
Perkins sold Redington and decided that Orvis had underestimated itself.
“We thought, we’re not that premium a brand,” Perkins said. “Really, Orvis is more mainstream than we thought. And there was nothing wrong with us marketing deeper into that pyramid.”
As a way of establishing and measuring the productivity of its employees, Orvis uses a method – refined by Perkins – called “KPMs,” or “key performance measures..” Each employee in the company has two; one measures their financial success and the other measures the quality of their performance.
“Your KPMs tell you how you’re doing,” Perkins said. “We really want everyone to know what they’re doing to drive the business forward.” KPMs are developed with employees’ managers. For example, Perkins said, the job of the woman in charge of customer service in Roanoke, Va., is to have the right number of people on the phones at the right times. Staffing there is managed by the hour, because there are large spikes of calls during certain times of the day and evening.
“So her financial. KPM is cost-per-order – $1.40 for each order taken,” Perkins said. “If she has too many people on staff, then the cost-per-order goes way up. If she has too few, then that hits her quality KPM. She is not supposed to have more than 2 percent of the calls get abandoned – that means the phone rings so many times that the customer hangs up. So if I say,’ How’re you doing?’, she’ll say, ‘Well, I’m running about $1.50 on my orders this month, but our abandonment is only 1 percent. Often the quality KPM pushes against the financial KPM. There should be some tension between the drive for efficiency and the drive for quality.”
Perkins’s personal financial KPM is to grow the company’s bottom line at 13 percent a yea over a 20-year average. The growth under his management seems to indicate some success. His quality KPM, which is harder to measure, is to make Orvis “the most respected lifestyle brand in America. “The way to measure the later is not fully developed, he said but will be created through customer surveys on reliability, civic reputation, and how the company stands behind its products.
“One finger-in-the-wind metric is the number of companies who call to say, ‘We would like to license Orvis, or ‘We would like to be affiliated with Orvis,'” Perkins said. “That’s going OK. If the phones are ringing, there’s something respectable and appealing about the brand.”
Perkins’s two main strengths are thinking big and staying true to the brand.
“I’m a real bore about things being brand-centric,” Perkins said. “There can be wonderful ideas, but if they lead us away from what our core is, I’ll usually say ‘no’ to them. There is plenty of opportunity within our brand-scope to do great things.”
Even though he grew up infused with
the Orvis ethos, Perkins said he truly fell in love with the brand about three years after he became CEO. At the time, the company had undergone some unexpectedly rapid growth, and Perkins found, to his dismay, that the brand had become overextended.
“All of a sudden Id get friends and peers almost poking fun of me, saying, ‘I see that great fly-fishing company of yours is selling some nice nightgowns to women,'” Perkins said. “It made sense to me that maybe a woman who knows about Orvis because her husband is into fly fishing, and likes country clothing, buys a nightgown from us. She trusts us and it builds brand loyalty. It made sense to me, but I don’t think it made sense to others.”
Needing to protect the brand, the company surveyed its male and female clothing customers, its fishing customers and its gift customers. It was looking to learn if people who buy clothing, for example, value the company in the same way as do the people who buy dog nets or fishing rods. “Fortunately, there was a fair amount of congruity,” Perkins said. “I don’t know what I would have done if there wasn’t. Probably split the company into four businesses. But there was enough congruity to work with.”
As a result, the company developed what Perkins calls a “brand filter,” so that for the future, even a nightgown would have something specifically “Orvis” about it.
“Maybe it would be a nightgown that someone in the country would wear, more than someone in the city – to use an
extreme example,” Perkins said. “So if you look in our catalog, there’s a picture of a woman in a nightgown, and she’s sitting on an Adirondack porch on a summer’s day with a cup of coffee in her hand. And it works.”
The company’s culture comes down to another of Perkins, Sr.’s commandments: “The customer is always right, even when he’s wrong.” For example, one Orvis fly rod comes with a 25-year guarantee. “Step on it, close the door on it, run over it with the car – it doesn’t matter, we’ll repair it,” the catalog claims. “If we can’t repair it, we’ll choose a current rod of at least equal value to replace it.” “I inherited a culture that my father had set through his management,” Perkins said. “It was very customer-oriented. If a customer called up and said, ‘I’ve owned this product for five years, and it fell apart; I want to return it for a fuill refund,’ we’d say, ‘Yes, sir, we’re sorry we disappointed you. Would you like a new one or ‘a refund?’ If I left the company alone for five years, that culture would be so deeply ingrained that it would still be there. I reinforced that.” Perkins added an open management style.
“The difference between my father’s management style and mine is that mine is really open and information-sharing,” Perkins said. “I’m going to trust to tell you how well we’re doing or how poorly we’re doing. Maybe you’ll misuse the information, and maybe you won’t.” Perkins also developed core values of integrity and mutual respect. “There’s very little backbiting here,” he said. “There’s very little
political climbing. There are antibodies in this company now that attack such things. If we hire someone who’s political, and all about pleasing the boss and not caring about the customer, the antibodies come out of the woodwork and get that person. That person usually goes away. So I’d say that culture is deeply ingrained here.”
Perkins’s worst weer mistake came the time of the rapid growth.
“Too many people had to wear too many hats,” Perkins said. In response, he created a “process-oriented system” that relied too heavily on inter-departmental cooperation, as opposed to “ownership and accountability.”
“There was too much hand-off, and things get dropped on hand-offs,” Perkins said. “It didn’t work. And it took us a little over a year to realize that ‘this isn’t toothing problems. This is a really bad idea. “Then it took the rest of that year to restructure it back the other way. For two years it was a pretty miserable place to work, because things weren’t working well and the results weren’t coming in, and it all seemed like too much work.”
True to his open style, Perkins admitted his mistake in front of the whole company.
“I stood up and said, ‘None of us are getting bonuses this year, and it’s because I made a big mistake,'” he said. “‘I led us into this dark hole, and I’m going to lead us out.”‘
Conservation is a core value of the company that has deep personal meaning to Perkins. Through him, Orvis puts 5 percent of its pre-tax profits into conservation projects every year. So far, the company has assisted with over 20 projects “that it believes its customers will also find meaningful.
“We focus on two types,” Perkins said. “The first is fishing, hunting, and wet
lands-oriented. Some are more biodiversity, nature-oriented. Each year we come up with at least one of each.” The projects are chosen after an exhaustive search among conservation organizations.
“We select them, we put up a matching grant, and we are often successful in getting a foundation to double our matching grant,” Perkins said. “Then we go to the customers. If they send in $100, it will be matched by $200. The money doesn’t go to an organization. It goes directly into the project. So far I think we only missed our fund-raising goal on one project out
of the more than 20 that we’ve done.”
This year Orvis is trying to raise $90,000 to restore California’s golden trout habitat in the Sierra Nevada mountains. The brilliantly colored gold-and-red trout is threatened on several fronts. First, non-native fish have been introduced into its waters, compromising the trout’s genetic integrity and also preying on them. Competition for scare resources is another problem, and cattle grazing has further degraded the habitat. Orvis is partnering with California Trout, Trout Unlimited and the state’s Dept. of Fish and Game to protect the fish.
Orvis has also raised money to help protect San Francisco Bay and to save the Rapid River brook trout in Maine. On Green Up Day, Orvis employees pick up
roadside garbage. The company also works with Casting for Recovery, a nonprofit that offers fly-fishing retreats for women who have had breast cancer.
Early on, one of Perkins’s most successful projects was to protect the local Battenkill River, famous in fly fishing circles, from the construction of an incinerator and ash landfill on its banks. The company recently did another project on the river, shoring up an eroded bank. In all, Orvis gives money to 61 Vermont charities each year. It focuses especially on causes dear to the heart of Orvis employees and their families.
“There are so many worthy causes and organizations asking for money,” Perkins said. “How does one make up one’s mind? I think a lot of customers find it
helpful that we say this or that is a particularly important one. We look for projects with tangible results. They are less about education and more related to an actual restoration effort or an acquisition project.”
Perkins is frequently approached about selling Orvis, but the family is not interested.
“We’re really happy running it the way it is now,” Perkins said. Perkins has two sons, 21 and 18, and his three siblings have seven more. So the family is now in’ the process of engaging a consultant to discuss the fairest ways of passing the company on to the next generation. “Both my sons really like the business,” Perkins
said. “I’ve been deliberately holding them at – arm’s length. I say things like, ‘With those grades, you’d be lucky to get a job with LL Bean, let alone Orvis. ‘They give me a lot of free advice, too, as you can well imagine.” Although he is not thinking about retirement, each year Perkins said he relinquishes more responsibility to the executive group that works underneath him.
“In some areas, that’s bittersweet,” he said. “I love the product. I really love the product, and I like to see get excited about small changes in things. But I realize that because of my status in the company, people may say they like me at the product meetings, but it might stifle the creative process a little bit. So I try to hang back.” Along the way, Perkins has managed to create a few commandments of his own.
“One is, when you hire someone to replace someone who is leaving, never hire anyone who isn’t better thin the person who left,” Perkins said. “Early on in my career, I dont think I set high enough standards about the kinds of people to bring. Another thing is, pay them a lot of money. Because if you pay them a lot of money and they don’t perform, it’s a really easy decision to let them go.”
Doing Business in Vermont
Vermont has a reputation for being unfriendly to business, and, as an extremely successful Vermont business owner, Perkins has spent time contemplating this paradox.
“Most people do not move to Vermont to create a business,” he said. “They move to Vermont because they love Vermont, and want to also create a livelihood. I think that’s just great for Vermont.”
People who are looking to move a business to Vermont should recognize that the state itself is the prize.
“Don’t expect to move into a place that has a great lifestyle and environment and expect the business amenities of Roanoke, Va,” Perkins-said. “It’s an unfair expectation.”
Instead of trying to attract new or already established businesses to Vermont, the state should focus on the successful businesses that are already here, Perkins said.
“It may seem self-serving to say this, but the state should make it worthwhile for businesses like mine to expand in the state, instead of trying to attract satellite businesses to open operations here,” he said. His understanding of Vermont life shows in his experiences with the state’s permitting process.
“We’ve expanded a lot in Manchester, and it’s slow,” he said. “When we were ready to build the new building, the state was a real pain to deal with. It was stupid stuff, like poor coordination, bureaucratic turf wars, dishonesty. It was awful. But the local regulatory bodies were wonderful. If you work with people, and you’re part of the community – and it helps a lot that my kids went to school here and I coached people’s kids in soccer – that’s the style of doing business in Vermont.”
Copyright Boutin-McQuiston, Inc. Jan 01, 2005
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