Man Of Vision

Greg Arnette is closing in on the big players of the eyewear world by staying humble, and never forgetting that it's all about fun.

By Sean O'Brien

At the 1994 SNOWboarding Industry Conference in Big Sky, Montana, eyewear entrepreneaur Greg Arnette showed his true colors. He was snowboarding with his son and co-worker Kip, co-worker Bruce Beach, and TransWorld employee Chad DiNenna. The group was riding a roller that allowed them to jump twelve feet of sharp rocks. The first run went fine, but things got skiddish the second time through.

Kip pointed out a rutted line leading up to the roller, and Greg -- barely stopping and without a second thoughtwent bombing toward the jump, lost it, skidded across the rocks and tore open both elbows. Bleeding and hurt, Greg went down the mountain for stitches. However, gashed elbows weren't going to slow down Arnette. He told the doctor to step on it, and was back riding two hours later.

Now is that any way for the president of a fast-growing company to behave? If you ask Greg Arnette, he'll tell you in an instant, "Yes!"

Arnette's career is varied, and spans a variety of industries. He grew up in the little burg of Ocala, Florida, took all the art classes in high school, and after graduation headed off to the design school in Fort Lauderdale.

He's been a professional surfer, a surf-shop owner; he's tried his hand at commercial design, and spent several years in the motorcycle industry working with Honda and Suzuki. It's these experiences, taken as a whole, that Greg considers his Big Break. "With all these activities, I was laying the foundation of my business," he says.

Arnette also was one of the early employees of Oakley, and one of the reasons that company grew in the 80s. However, his tenure at Oakley ended in controversy and hard feelingsa period of his life that he tries to steer clear of in interviews.

Now, Arnette Optical Allusions is experiencing the rush of growth, and Greg's sunglasses have captured hardcore userssomething Greg is understandably proud of. We recently caught up with Arnette for the lowdown on his management style, and where his company is heading in the future.

How would you describe your overall market segment? What have you done differently in it than your competitors?

I didn't want to be like all the other eyewear companies out there. I wanted to be in the 'core sports with the 'core people who make it happen. I wanted the company to be out on the edge. Not too far out on the edge, where you would have Mom and Dad calling and saying they didn't like this ad or our company represented this wrong, but I wanted to be out on the edge to the extreme part of all the sports we're with. You know, snowboarders launching the biggest airs, and surfers riding the biggest waves.

How much of your success has been hard work and good instincts, and how much would you ascribe to luck?

I think you make your own luck. Our designs were some of the first designs to catch everybody off guard. That's been one key, and it all goes back to getting the right people to work for you, and the right team guys. Those three things, our designs, employees, and team riders, are the important ingredients to making the company successful. You can have the best designs in the world, and if you don't have the right employees to work under you, and if you don't have the right team guys to get it out there and promote it, then the retail stores aren't going to get behind you.

How would your customer describe your company?

I would hope that they would say, "Arnette's not like everybody elsethey are always pulling something out of the hat that's different." The hard part with any company is that as the company gets older, it takes a lot more work to come up with something new and different. However, that's exactly what's going to drive your success and keep you in the marketplace.

How do you position your products in terms of pricepoints? Many sunglasses on the market are super expensive. Are customers really getting what they paid for, or is the value just perceived?

A lot of the value is perceived. You can go and buy somebody else's brand and it might have a wire-injected temple, or another feature, and you're looking at a 150- to 300-dollar pair of sunglasses. We take those same ingredients and put it in our line from 60 dollars up to 100 dollars.

Buying a snowboard, pair of boots, and bindings takes a lot of money. I want that customer to be able to afford our sunglasses and know that he's getting a good, high-quality product at a reasonable priceand not just paying for a name or for some piece of plastic that costs 50 cents to make.

Who would you consider to be your company's prime competitor?

We look at all other companies to be our competitors, but we look at ourselves as our worst competitor. We're constantly trying to push our products further and make things better. After all, when one of our sunglasses hits the market, our designers have been looking at it for at least four or five months. They're over that design already. They're already busy trying to outdo what they've just done. We're always trying to beat ourselves.

Oakley reported that it spent almost seventeen-million dollars in 1995 on research and developmentapproximately ten percent of sales. In 1994, Oakley spent twenty percent. What percentage of sales does your company spend on R&D?

I think in general R&D figures are a little bit padded. I really don't know the exact figures that we spend on R&D, if you can believe it. I'll work month after month on a design, sculpting it with bondo and plastic until the design is right. What dollar amount can you place on that? Then you get your molds done. So you're looking at a couple hundred-thousand dollars by the time you've finished your tooling and molding. We go out there and test it before we offer it to the marketplace to make sure it's right. The worst thing you can do is to have a bunch of recalls.

How big is your company in terms of sales?

I really don't want to give that figure out. That way the other guys don't know what we're up to.

Are you selling primarily fashion or technology?

I think we try to sell function and fashion. If you're just trying to sell a technical piece, that technical piece could look awfully ugly and gaudy on your head. We try to sell our technical parts with a flash and flare, so everyone can wear it on the snow or off the snow, down at the beach, and driving at the car.

How has your vision of your company changed since you started?

I don't think the vision has changed at all. I'm still like a little eighteen year oldI just want to go snowboarding and surfing all the time. When your company grows, you have to deal with more employees and responsibilities, but you can't forget why you started the company. When we started, there were only four or five of us, and no one worked on Friday. We'd pile in the car on Thursday night and drive to Mammoth to go snowboarding. Although our company has grown, we still don't work all day on Fridays; we only work until 11:00 a.m., so everyone can go snowboarding or surfing.

As long as I'm here that's the way I want it. That's what drives our whole deal. That's the whole thing behind our company. Play and fun ends up as work, anyway. When we're out there snowboarding and having fun, we're also working. We're shooting the bull about what the market's doing or where it's going. Don't get lost from where you started from.

How would you describe your management style?

We shoot from the hip. I try to keep out all the suit-and-tie guys and keep the guys who are doing our sports. I'm always promoting to the management guys that they should get out in the surf or snowboard so they know what's happening out there. When they get back on a Monday, they're fresh. They've been out there in the field and they know what's been going on and can drive it back into our company.

I think some companies get into the Monday-to-Friday thing. You know, the suit-and-tie thing. They keep a lot of things strict and they don't really know what's happening.

What you're describing is a pretty laid-back, core company, but you're owned by Bausch & Lomb. What do they think of your business?

Bausch & Lomb acquired our company. I'm the president of Arnette Optical Allusions and I'm on the board at Bausch & Lomb. However, Baush & Lomb has nothing to do with our company. We make our own decisions, and we drive our company the way we want to drive it.

Last year, the Hong Kong division of Bausch & Lomb was accused of stashing 500,000 sunglasses in warehouse and then pretending that these sunglasses were sold. Did that affect your company at all?

We don't get affected by them at all. They don't have any say in our company. They have no say in what we design or make and where we sell our products. We don't have any Bausch & Lomb reps, we have our own guys. The last thing I need is for Bausch & Lomb to come in and have us work with all its reps. Arnette is its ownwhat would you sayentity.

I think they're hoping that we will bring life to Bausch & Lomb. They wanted a higher niche company that could help drive Bausch & Lomb. By acquiring our company, they're learning from us, and they don't want to spoil anything. They came in and said, "Hey, you guys know what's happening, you guys know your deal; just have a good time and keep selling!"

We've been teaching those guys how to snowboard. They used to wear suits and ties to their office and when the president came out here, he couldn't believe we were walking around in shorts and T-shirts. But now, Bausch & Lomb has changed its dress code.

How fast is Arnette growing?

We're successful, but I've been trying to make sure we keep a good foundation and keep it steady. We've been very cautious about trying to blow it out. A lot of chain retail stores have been wanting us to just sell a mass of sunglasses to them. I've put a stranglehold on that. We want to keep our base strong, and with the accounts that have been behind us. We want to be in business for the next twenty years. We don't want to be out in two or three.

Sunglass Hut recently announced less-than-stellar September sales and some sunglass stocks took a dive. What risks does a manufacturer accept when establishing these close relationships with retailers like Sunglass Hut?

There's a danger. There's a big danger because they can say "we're going to do twenty- or 30-million-dollars' worth of your business this year," and so you gear production and then they turn around and say, "you know what, we want to cancel those orders." Where are you then? You're out of business. Or, if you're a public company, your stock just went in the tank. So, when you go with those big companies, you have to be careful on how you go in bed with them. We've avoided those problems.

Who are your typical retailers then?

Primarily, snowboard shops and the surf shops. We have a few optical shops in Hollywood, and a few of the sport shops that are into the retail part of the snowboard business.

Looking at your company as a whole, what percentage is attributed to snowboarders? Is it a really important part of your market?

Let's say you take 100 percent and you put a number on snowboarding and surfing. For us, they're neck and neck. The two sports are a good crossover, and that's what's made the whole thing boom. You've got guys in the Midwest who want to be surfers and now they canthey can snowboard.

Are your sales extremely regional?

We're really strong on both coasts, but in the Midwest, it's become a lot stronger this past year. In any business, when you're a California company, your growth will start on the coasts and then drive into the center.

Are there any significant hurdles that you feel your company has to overcome for it to reach the goals you've set for it?

There are so many people trying to jump into the eyewear business that the next couple years is going to be about keeping the right designs and the right marketing, without overspending tremendously. There are going to be a lot of competitors coming and going and, as you probably see in all the ads, there are a lot of sunglass companies coming out of the woodwork. Well, the strong survive, so hopefully we're going to be one of the strong ones to survive.

Do you want your company to become as big as, let's say, an Oakley?

As it grows and gets big, I want to make sure that we don't lose the fun part of it. I don't know if those guys [Oakley] are still having fun, but I know we are. I don't want to lose that fun part of the company. You can get way too big and thenjust like what's happened to themretail sunglass sales sink, and your company tanks, then you're scrambling to try to pull it above water. I don't want to be in that position.