Ever heard of GSM Outdoors? They just bought Cold steel.

jlauffer said:
Short video of Lynn talking about the sale to GSM. Claims he and Demko aren't going anywhere, and that GSM will take CS to heights Lynn never could.:rolleyes:
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tltt said:
It was a pretty standard thing -

Lynn and Demko , and some of the old guard are staying with the brand. He went with GSM because he feels they were the best to carry on his and Cold Steel's legacy. He feels that GSM offers better buying power and logistics than Cold Steel has ever had, and that in turn will lead to some exciting projects in the future.

Ends with an apology to the industry and fans who might of thought some of his actions were distasteful over the years.

It was sort of quick and dirty, they might have pulled it to polish it up some.
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Thanks! :D
 
Sounds more like he sold the IP, closed the company and negotiated a spot for himself in the new ship.

Honestly when buyouts like this happen you do expect some staff to be shed because big companies like that probably have someone else on their payroll already doing that same job. But usually they don't set the roof on fire before they even get in the door.

It's a really bad idea to do this because they would have paid for the name and the goodwill and the long established customer base. If your first moves are to erase all that then why pay that much? Why not just start a new arm of your own company.
 
eisman said:
no, you really can't. You have to pay medical, unemployment, inventory tax, property tax, utilities, etc every month. that's another 1/12 of the yearly expenses. For a month when no one works? That's crazy. You can pay a bonus, or if the employment contract has a parachute that needs to be paid, but you do not want to go into another year with anything attached, if only to prevent having to file for the year. Remember businesses have to file quarterly and annually, and that takes time and money.
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Fair. I'm certainly not naive to business and have been in many aspects of the reduction affairs, including on the receiving end. I'm talking about keeping them on until Dec 31st. Not sure that lessens the sting by much but at least gets them through.

On the other hand, I understand there's sabotage, apathy, and such concerns.

Tough deal all 'round.



rje58 said:
As one who was initially willing to give benefit of the doubt, yes, it's beginning not to look good.

HOWEVER, no offense to Eli, but I will reserve final judgement beyond 'some kid' who answers the phone. There needs to be a little more information fleshed out than that before we start condemning what someone did - or perhaps didn't do.
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No offense taken.
 
Danke42 said:
Sounds more like he sold the IP, closed the company and negotiated a spot for himself in the new ship.

Honestly when buyouts like this happen you do expect some staff to be shed because big companies like that probably have someone else on their payroll already doing that same job. But usually they don't set the roof on fire before they even get in the door.

It's a really bad idea to do this because they would have paid for the name and the goodwill and the long established customer base. If your first moves are to erase all that then why pay that much? Why not just start a new arm of your own company.
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Shedding staff in a buyout is to be expected, but how they were treated on the way out is what we're wondering about. With a pretty small staff, would've thought they'd be given something, especially with this happening right before Christmas. If they got nothing but a boot in the ass out the door, then that tarnishes Lynn's legacy IMO, a legacy that he seemed to care about in his video.
 
jlauffer said:
Shedding staff in a buyout is to be expected, but how they were treated on the way out is what we're wondering about. With a pretty small staff, would've thought they'd be given something, especially with this happening right before Christmas. If they got nothing but a boot in the ass out the door, then that tarnishes Lynn's legacy IMO, a legacy that he seemed to care about in his video.
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s-l300.jpg
 
We are at an interesting time in the knife community where a lot of the old greats and founders of big and prominent knife companies are starting to all die off.

My impression from the video was that this was Lynn's way of continuing the legacy of Cold Steel.

Benchmade and Spyderco have passed on the reins of their companies to their heirs.

I suppose this is one of the many options one has when deciding what to do with a company when time is getting shorter.

No one lives forever.
 
not2sharp said:
Comes across as as arrogant and lame. No mention of the team that supported him for 40 years. It sound like he is reading Words from a teleprompter That were written by GSM. Just this message tells me everything that I need to know Cold Steel.

They are dead.

n2s
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My thoughts too. That video of “positives” MAY have been part of the sale...it happens.
 
Its not uncommon for a newly bought business to keep a couple of senior advisors on staff while things get situated. It's generally part of the buyout agreement along with a non-compete for a certain period of time. It allows a smoother shift if other employees are kept on and gives customers a bit of a sense of the "same ol same ol" while everything is retooled to fit the needs within the business to enact its plan.

A local material provider was bought out by another from overseas. They have kept the senior partner on hand to oversee operations the last couple of years. He doesn't seem to mind as he was always very hands on with the business and liked it that way, and the customers know they can still call him even if he doesn't have the same authority as he did before.

I am not buying Lynn's video promise. When a newly bought company starts proclaiming about how nothing will change and things will be better than ever...
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DeadboxHero said:
I suppose this is one of the many options one has when deciding what to do with a company when time is getting shorter.

No one lives forever.
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It sounds like the option that you accept when the company is deep in the red and the hungry wolves have you surrounded. Let’s face it; if the new owners perceived Cold Steel as anything other than a bunch of losers, they would kept the crew around at least until they could get a grip on the secrets to their success.

It sounds like the only thing they bought was the brand name, some good will and whatever working inventory was on hand. IP is nothing on these products; you can’t patent a knife, and the soon to be pissed off supply chain will simply dump the stuff on the market under their own brand.

N2s
 
Steely_Gunz said:
Its not uncommon for a newly bought business to keep a couple of senior advisors on staff while things get situated. It's generally part of the buyout agreement along with a non-compete for a certain period of time. It allows a smoother shift if other employees are kept on and gives customers a bit of a sense of the "same ol same ol" while everything is retooled to fit the needs within the business to enact its plan.

A local material provider was bought out by another from overseas. They have kept the senior partner on hand to oversee operations the last couple of years. He doesn't seem to mind as he was always very hands on with the business and liked it that way, and the customers know they can still call him even if he doesn't have the same authority as he did before.

I am not buying Lynn's video promise. When a newly bought company starts proclaiming about how nothing will change and things will be better than ever...
1-b-AUTC-8-AK9-WQ3-A5-Ba-ZRh-Xw.jpg
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Very well said. I concure.
 
CS likely has nothing in physical assets. If Lynn had real estate for the office or warehousing that wasn't leased, it was almost assuredly in a real estate holding company anyway. GSM bought IP, nobody needed to have a look at any facilities. Lynn was likely the sole managing member. No one else had to know much outside of his lawyer and accountant. With the move in headquarters, an existing admin staff for GSM, offshore production, and likely a wholly update marketing strategy, who were they going to bother to keep. Since the acquisition would be kept confidential, no one would have been told.

Lynn was obviously doing well with CS. Who knows how CS was doing, it's a privately held entity with no public reporting. Salary, distributions, loans, however he was doing it he was doing well for himself. Why sell? Maybe he's ready to hang it up. Maybe there's issues with the business entity he wants to separate from. Maybe he wants out of any guaranties he was on the hook for. Whatever his reason, the company is gone. The intangible assets are effectively all that remains. He probably has an employment contract for a year or two and perhaps a non compete for five, but he doesn't have to be in charge any longer and doesn't have to sign on any more dotted lines. And his employees no longer have jobs.
 
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not2sharp said:
you can’t patent a knife,
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Yes, you can. Ron Lake got a patent just a couple years ago.

not2sharp said:
It sounds like the option that you accept when the company is deep in the red
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It's the option you take when you don't want to run the company any more. CS has been one of the more profitable knife companies of the last 10 years and their Annual Reports are available. Look at the companies that have gone away in that time...

The majority of CS personnel in the USA were warehouse, sales, and marketing. That's not the folks you keep. (And yes, I know. I have toured the building in Oxnard.)

I've been in their shoes. Laid off in '91 on 30 DEC. Laid off in '02 first week of DEC. Lost another job 31 DEC in 2015. The holidays suck.
 
The concept of a knife cannot be patented as it is very old and very common. A unique feature, mechanism, or method having to do with knives can be patented.
 
not2sharp said:
It sounds like the only thing they bought was the brand name, some good will and whatever working inventory was on hand. IP is nothing on these products; you can’t patent a knife, and the soon to be pissed off supply chain will simply dump the stuff on the market under their own brand.

N2s
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Cold Steel has gone after resellers of counterfeit and grey market knives in the USA and won. It would not be unexpected for GSM to do the same.
 
I did not read the entire thread. This comes as a surprise, or maybe not surprise at all. Cold Steel folders are good - they are strong, reliable, and have great value of use. But that's about it. The fit and finish, quality, and materials are one level down as compared to Spyderco and ZT and arguably Benchmade. It was a bad move to increase their prices to the same levels as those companies. Now with this sale of the company, the price increase move actually makes all sense to me.

I never saw after sale of the entire company, the brand became better. Most often it just disappears. So if you are a CS fan, you may want to grab some more now. I have now only one, which is Recon 1 with cts-xhp steel. But I do not plan to pick up more - the prices are just now attractive.
 
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