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

For 40 years , Cold Steel has been the very best in the business , IMO . :cool::thumbsup::thumbsup:

The most innovative , best performing , highest value products and by far the greatest entertainment value advertising and training videos .

LT wasn't afraid to produce , promote , and "proof " great , fun stuff that nobody else would have ever thought of or dared to market .

Sad to see the name being dragged through the mud by individuals that have contributed far less to the world . :(
 
DocJD said:
For 40 years , Cold Steel has been the very best in the business , IMO . :cool::thumbsup::thumbsup:

The most innovative , best performing , highest value products and by far the greatest entertainment value advertising and training videos .

LT wasn't afraid to produce , promote , and "proof " great , fun stuff that nobody else would have ever thought of or dared to market .

Sad to see the name being dragged through the mud by individuals that have contributed far less to the world . :(
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You do know that he chose this path, right? Who is dragging what through the mud?
 
not2sharp said:
We are not criticizing what he did, we are criticizing how he did it. We, his customers, his dealers and his employees kept his company going and put the money in his pocket and the turd sold us out without a word of explanation. Kind of reminds me of the captain of the Concordia.

n2s
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I guess I just see it a bit different. Frankly, as a business owner myself, I fail to understand why I would need to explain anything to anyone why I choose to run, or in the case sell, my business.

You share that information (If you choose) after ink is on paper and terms are agreed to the public, your clients, and your employees. It sounds terrible, but is necessary in many cases.

Lynn did explain why in a public video.

If employees were paid severance, of that I have no idea. It may depend on their level of contribution, time spent, etc. From what I have only read here is one employee stated they were all just fired. That is terrible, I agree. Non-salary positions do not typically get severance. A parting financial gift would be a nice gesture though, especially now during these rough times. And I would also hope that severance was paid if applicable.

We can only speculate much of this. I personally don’t see anything to be excited about from what we have seen, and have serious doubts that Cold Steel will remain a premium brand. The warranty, as many have noted, is atrocious.
 
All other things set aside for a moment and just focusing on that video, it's possible he believes what he's saying. They might have told him all those things and nothing's gong to change and he's still going to have all this creative influence and so on and so on. That doesn't make it reality. He was clearly looking to get out of the ownership aspect. Not disparaging him for that but he may be so high on stress relief and their promises that he believes that it is all sunshine and roses.

Give it a two-five years and check back.
 
[QUOTE="MolokaiRider, post: I personally don’t see anything to be excited about from what we have seen, and have serious doubts that Cold Steel will remain a premium brand...[/QUOTE]

Never really have considered CS a premium brand.

More like one step below.
Kind of like American Motors compared to Ford and GM.
 
Eli Chaps said:
On the other hand he looked like a hostage reading a script so...
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That's because he really was a hostage reading a script that was carefully written by his new owners and partners. The new owners are Gridiron Capital, a private equity firm that buys and sells companies like the rest of us buy and sell consumer knives.

There is zero chance they would let a loose canon like Lynn Thompson say what's on his mind.

Private equity firms are a big business in the United States, thanks in large part to highly favorable legislation written by the politicians they own. In 2019, private equity firms were worth $3.9 Trillion -- that's "T" as in trillion. That value was up 12 percent from 2018.

PE firms pool the money of wealthy, sophisticated investors and pension funds to purchase non-public companies, often as leveraged buyouts or venture capital inputs. They invest to gain control of their companies, usually with a 4-7 year investment period. Their goal is to create a high return on investment in the short term. Then they sell.

Gridiron is based in New Canaan, CN. It specializes in partnering with founders, entrepreneurs and management teams. It's possible that Thompson retains some equity, but it's difficult to say because Gridiron didn't buy Cold Steel, it bought GSM Outdoors, which had earlier purchased Cold Steel when it was part of Sentinel. The terms of Thompson's Sentinel deal would likely have carried forward.

Gridiron purchased GSM from Sentinel Capital Partners, which is based in New York, in November.

Sentinel is another private equity firm. It purchased GSM in June 2018, with the help of mezzanine funding from Yukon Partners, a Minneapolis-based firm. Mezzanine financing is highly lucrative, with returns running from 12-30 percent a year. One of the advantages of mezzanine funding is that in the case of bankruptcy (after pillaging by the PE firm), its debt is rated above that of the existing owners.

Sentinel, like other large PE firms, owns many, many companies in many different lines of business. It specializes in lower, mid market companies, usually through management buyouts, recapitalizations. It profits through balance sheet restructurings (creative accounting) and turnarounds. It looks for companies with earnings below $65 million.

Sentinel also looks for companies with good potential and high-quality management teams who want to gain some equity.

We don't know what Lynn Thompson's terms of sale entail, especially because he's now just a small part of a small part of a much larger organization that is utterly focused on return on investment and a quick sale a few years down the road.

The new owners are not knife people. They don't care about knives. They specialize in taking a lot more money out of an organization than they put into it. All these finance people and these revolving ownership deals pull money out of the companies they invest in.
 
craytab said:
You do know that he chose this path, right? Who is dragging what through the mud?
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:thumbsup:
Oh man , this is getting down right comical . :)
tenor.gif
 
Just like all of you, I don't have firsthand knowledge of the agreement between GSM and Lynn Thompson. But I do recognize that under most such transactions, the seller doesn't get much (if any) say in what happens to the assets, including personnel, after the sale. If you start making demands like, "You have to keep the entire workforce employed for another six months" or "You have to retain all of these models in the catalog," you aren't going to find a buyer. Buyouts don't work like that.

Several years ago, Cold Steel put the following on social media.

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I remember that Lynn also gave his most senior employee, Robert Vaughn, a new car for one of his employment anniversaries at Cold Steel. Lynn gave Dan Maragni a check to celebrate his twentieth year with Cold Steel.

Regardless of how the sale to GSM turned out, I don't think anyone can honestly accuse Lynn Thompson of not looking out for his employees or of being stingy.


-Steve

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Here's my read on the video. Keep in mind I work in business and deal with lots of folks near enough to tops of related businesses that I get a lot of direct information...and that I'm generally a cynic.

Lynn 100% knew this was going to happen when purchased. He 100% knows that nothing is going to be better short of the buying power that will allow what ever products they churn out to be profitable enough for the buying group. He's not a fool. He's a guy who spent 4 decades crafting his brand. He has seen this movie before.. Anyone who has been in business long enough to see competitors bought out knows what is going to happen to their staff and that everything the are handing over like the IP is basically 100% out of their hands.

Im not saying he was wrong to sell. Hell, im not saying he was at fault for what happens to the employees. If you are big enough to be purchased, then that is part of the game. All the folks who worked under you are now not under you and their fates are held in the hands of the purchaser.

At the end of the day he's being kept on to ease the transition of the shifting brand and to be kept on a short no competition/watch your mouth leash. Its natural for someone who built something to speak out when its being butchered. Keeping him close will muzzle him.
 
Does anyone even have confirmed information that employees were all let go? Sounds like a lot of speculation and guessing in this thread.
 
Quiet said:
-snip-

they always release some statement from the (now former) owners like "We're still here, and will still be making the beer (knives) you love, and it's going to be great! You'll see!" because they were told by their new masters to try to stop the inevitable customer abandonment. They try to spin the buyout as some sort of new partnership, when really no, Inbev (GSM) now owns you, and was basically just wanting to buy your customer base.

-snip-
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Man, did I call it or what? I didn't even watch all the way through Lynn's video, didn't need to. I've seen this all many times before.
 
Steely_Gunz said:
Here's my read on the video. Keep in mind I work in business and deal with lots of folks near enough to tops of related businesses that I get a lot of direct information...and that I'm generally a cynic.

Lynn 100% knew this was going to happen when purchased. He 100% knows that nothing is going to be better short of the buying power that will allow what ever products they churn out to be profitable enough for the buying group. He's not a fool. He's a guy who spent 4 decades crafting his brand. He has seen this movie before.. Anyone who has been in business long enough to see competitors bought out knows what is going to happen to their staff and that everything the are handing over like the IP is basically 100% out of their hands.

Im not saying he was wrong to sell. Hell, im not saying he was at fault for what happens to the employees. If you are big enough to be purchased, then that is part of the game. All the folks who worked under you are now not under you and their fates are held in the hands of the purchaser.

At the end of the day he's being kept on to ease the transition of the shifting brand and to be kept on a short no competition/watch your mouth leash. Its natural for someone who built something to speak out when its being butchered. Keeping him close will muzzle him.
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For the record, I completely agree he understood exactly what was going to happen and I think he knows damn well where they are headed.

Maybe he's getting sales percentage checks for a while so he's super stoked about the idea of Walmart and Cabelas.

I sincerely hope I'm wrong about the direction but I remain highly skeptical.
 
jeffsenpai said:
Does anyone even have confirmed information that employees were all let go? Sounds like a lot of speculation and guessing in this thread.
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Well according to Eli in the thread, the guy answering the phone at the head office made it sound like it was a pretty swift and complete culling.
As been stated, CS is not really a production company. A small staff to run the day to day business in the office. Since the IP is what the buying group wanted, there isn't much reason to keep anyone beyond a "face" or two.
Its just the way it is. The employees are looked at as an expense by them. I dont mean that in a judgemental way. They are simply weighed against the value of the company's worth. If you aren't worried about returned emails from that location and having parking lot sales and filming swords chopping up pigs, then there is no reason to keep anyone on.

The fact of the matter is that how this was handled after the sale was out of Lynn's hands. We can all wish he would have done the "right" thing, but at some point you have to realize that he's not running a charity and that the business was worth X dollars to a big company to a guy Y-years old looking to get out of the rat race. Short of just taking a massive money loss and shuttering the doors and diving the profits up among the workers, there isn't much more to be expected of him.

Now I would like to think that he was able to reach out to some old hands and make some calls to other places of employment. I'd like to think he sends them all a bit of their salary out of his profits. I'd like to think a lot of positive things, but the fact of the matter is that while we associate Cold Steel AS Lynn Thompson, it is not. Cold Steel is ink on a page and spreadsheet of debts and credits and costs and profits.

I think Lynn just wants to go home. He's probably lucky they didn't want to demand ownership of his likeness lest we end up with the Colonel Sanders of the knife world.
 
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