Yahoo Finance’s Alexis Christoforous and John Merris, Solo Stove CEO, discuss demand amid COVID-19.
ALEXIS CHRISTOFOROUS: As part of our ongoing series, Investing in the Great Outdoors During the Pandemic, we want to welcome in John Merris. He is CEO of Solo Stove. John, good to have you here. For folks who are not familiar, you sell things like fire pits, camping stoves. You just started recently selling a charcoal grill. I know you were seeing 100% year over year growth even before the pandemic. Tell us what business is like now.
JOHN MERRIS: Yeah, thanks, Alexis. Glad to be here. The beginning of the year did start off fast for us. We were already in a hyper growth mode. But when the pandemic hit, what we saw is all these people stuck at home. And we saw an immediate acceleration of that growth. We've been up over 300% this year since the pandemic hit.
ALEXIS CHRISTOFOROUS: Wow, so now you're entering the holiday season. Weather is getting cooler. We're going to be in winter here in the northeast soon. What are sale-- how are sales trending now? And are you seeing strong holiday demand?
JOHN MERRIS: Yeah, always a very busy time of year as people get prepared for the holidays. What we're seeing this year is, it's happening earlier. So we're seeing consumers concerned about whether or not products are going to be in stock, not just with fire pits, but we're seeing it across all categories.
And so, ultimately, what that's leading to is earlier holiday shopping. We've seen, as we're getting prepared for the holidays and what's coming, we're seeing growth four or five times what we saw this time last year as we lead up to Black Friday.
ALEXIS CHRISTOFOROUS: So our consumer is right to be scared that perhaps some of those products won't be there, John? Are you having some challenges keeping up with demand right now? What should consumers expect?
JOHN MERRIS: Yeah, most definitely. I think just across all categories, there's more demand right now for shipping products from overseas into the country. We're seeing products stalled, even inner country with shipping carriers trying to get the products to consumers.
Because of all of this demand and the adoption to e-commerce, things are just harder to come by right now. So we are definitely encouraging our customers that are calling in, don't wait until the last minute. You need to get your products now that you want to have under your tree for Christmas.
ALEXIS CHRISTOFOROUS: Have you sold out of any products in particular, John?
JOHN MERRIS: We've consistently had stock-outs since the pandemic hit back in May for us and then constantly kind of been replenishing stock. So, currently, most of our SKUs, our most popular SKUs are on backorder, although they will be shipping around Black Friday.
So right now, our demand is backordered, but pushing us through kind of the first week of December. We have lots and lots of inventory coming in. We're hopeful that we'll be able to fulfill all orders before Christmas, but certainly waiting to see how that demand comes through.
ALEXIS CHRISTOFOROUS: It's a good problem to have as a business owner, but talk to us about what people can expect. I mean, what are some of the trends you're seeing in terms of what people are buying? What are they gravitating towards right now?
JOHN MERRIS: Yeah, what you've seen since the pandemic hit is people are stuck at home. And when you're stuck at home, you eventually kind of get tired of that. You get a little sick of being stuck inside, and also, just the constant feeding of news and so forth. And so, we're finding that people are looking to extend their backyard living spaces. They're looking to get outside a little bit more. If you can't get outside safely outside of your home, the best next thing is to go to your backyard.
And so, we're seeing our products be a really nice safe haven for people. And even sitting around a fire, you're still able to social distance. So you can even connect with some of the people that you're closest with, but still keep your distance and have a good time. Being able-- as you mentioned earlier, when the time is getting a little bit cooler outside, the climate is getting cooler, being able to kind of extend that living space and have a little bit more time outside is always just a nice blessing.
ALEXIS CHRISTOFOROUS: Now I know you bootstrapped the company with your brother early on. You never had to raise capital, which is a nice position to be in. But just recently, you partnered with a couple of private equity firms, Summit Partners and Bertram Capital. Why do that now?
JOHN MERRIS: Yeah, I think-- so our couple of core founders that started the business back in 2010 were just looking to spend more time with their families. It was a great opportunity to bring in some outside capital. They also are helping us with the explosive growth that we have going on. So as we look to continue to expand our production, bring in more inventory, make sure we can service customers, they are the right partners to help us do that.
ALEXIS CHRISTOFOROUS: I know you sell your stuff at a bunch of different brick and mortar stores, including Dick's Sporting Goods, REI. Are a lot of these sales coming online to you, or is it through the brick and mortar?
JOHN MERRIS: The vast majority are coming online, although we are seeing great growth in our brick and mortar stores now. There was a slowdown for about 90 days kind of post-March. And since then, what we're seeing is, brick and mortar is starting to pick up, especially as people are looking to get their holiday shopping in. But still, the vast majority is on solostove.com.
ALEXIS CHRISTOFOROUS: Real quick, in the 10 seconds I have left, I read that you say Korean barbecue has been pretty big amongst your customers.
JOHN MERRIS: Yeah, we-- with this new grill that we just launched that you mentioned earlier, a charcoal grill really designed to sit around at a sitting height so everybody has tongs in their hands and is kind of cooking together, enjoying a meal together, we're finding that that trend is starting to really pick up.
ALEXIS CHRISTOFOROUS: All right, John Merris, CEO of Solo Stove, thanks for being with us.
JOHN MERRIS: You're welcome. Thanks, Alexis.