Episode 348: Three CEOs, Billions in Revenue, One Stage (skucamp 2025)

They lead some of the largest and most influential companies in our industry. They've orchestrated major acquisitions, scaled operations to hundreds of millions, even billions in revenue, and are driving innovation in tech, sustainability, and supply chain at a scale few can even imagine. In this special live episode from SKU Camp hosted this past week in Scottsdale, we're featuring a panel led by CommonSKU's CEO, Catherine Graham. You'll hear today from Frank Myers, who has transformed S&S Activewear, from a regional distributor into a national powerhouse with a massive distribution network across North America. From CJ Schmidt, who has guided HIT Promotional Products from a family business to a top 5 supplier known for its relentless growth and bold expansion. And Pierre Montebon, who is shaping Koozie Group into a future-focused business, balancing private equity growth with a deep commitment to sustainability and operational excellence. Welcome to the SkewCast. The podcast for innovators and maverick thinkers in the promotional products space. My name is Bobby LeHew. I'm glad you're here. In this episode, our panel covers mainly 3 topics, but we veer into some other topics as well. Number 1, the discipline and challenges of leading mergers and acquisitions. 2, how AI, automation, and digital transformation are changing the way we work. And 3, tariffs, the health of our supply chain, and a look at the road ahead. Today's episode is brought to you courtesy of us at CommonSkew. Over 900 distributors powering $1.8 billion in network volume rely on CommonSkew's connected workflow. Process more orders, connect your team, and dramatically grow your sales. To learn how, visit commonskew.com. Now here's our conversation recorded live from the Skew Camp stage in Scottsdale.

So we have got quite a group up here who's going to be able to give you some fantastic perspective that you don't often hear from a day-to-day aspect. In a year that's been wild, 2025 has brought lots of adventures on the tariff front. There's never a dull moment. And for those distributors in the room, we're certainly dealing with that on a day-to-day basis. But what you have to contend with as a supplier is completely different on that front. So we're going to cover a wide variety of topics, starting with M&A, which is the hot one on the bench here. So, Frank, we're going to start with you. Welcome to SKU Camp. You've led S&S through several acquisitions now. What has been the hardest part of execution and what has worked well? Can you share an example?

Yeah, I think in my time at S&S, we've done 9 acquisitions. Everybody always is like, the hardest part's the people and the cultures, and that's definitely a very challenging, or can be a very challenging, but is ultimately the most important thing. What I think particularly with the AlphaBroader acquisition, there's a propensity and desire to move fast. And we really took the time to think about the customer and what the customer needed and the way that the two companies were very differently solving the same problems for all of you. And so I think taking the time to move slower than we knew we could and solve for the future need of our customers and the industry and set ourselves up to to support the growth of the industry took the most discipline and was the hardest part of that whole thing.

But you still moved insanely fast.

Yeah, we did.

So what do you attribute that to, the ability to move that quickly?

In 2009, we decided to build our own tech stack. And so we control our software. And we have a team that's been with us for a really long time. And we've obviously done a bunch of deals. So we had the loose playbook written. And so we were able to move— really fast. I think we did. We ended up converting the system June 1st, which was like 18 months faster than what we had underwrote. The deal closed in October, and so we were off the legacy system 7 months or something. But being able to have a solid technology backbone and make sure that we weren't going to disrupt the operations of our customers, and that kind of gave us the conviction and courage to really hit go.

And S&S is now a Connected Plus supplier.

Yeah. Yeah. I mean, the ability to like look at the two companies and there's some differences in the way we're engaging with Commonsku. And so I think you said something in your talk, which was right, which was like not being stuck to your old ways or understanding if maybe you hadn't approached things in a way that made sense for where you want to go. We're really excited about the partnership with Commonsku and I think should be a good thing for everyone in this room. Thanks for the opportunity to work with y'all.

Pierre, you've recently had a different experience where two portfolio companies owned by your private equity backers have come together with Koozie and Gary Line. So it's a bit of a different path. Can you speak to how that decision came together and what the transition has looked like?

Sure. Glad to be here, by the way. Met a lot of people, so thank you very much for having me at Common Skew, first conference. So in the private equity world, I've been CEO for the last 2 and a half years and lived through two private equity private equity firms in this, in this stint, and usually the bigger buys the smaller, and you don't need two executive teams. And a very different situation where a private equity firm that acquired Koozie Group back in April already owned Gary Line in this, in our industry, and they bought us for our brands, for our Made in USA capabilities, but also for the team that I am leading. So they bought the management team, and officially tomorrow, so you're going to have a heads up, we're going to We're going to combine the two companies and we took our time with Imagine Brands, as Frank said, the first one was taking your time and the second one, we had the playbook so we can go faster. So 1st of January, 2nd of January, the two companies will, will merge into only one.

Hi, CJ.

Hey.

So you've grown HIT into a top 5 supplier without doing large brand acquisitions, but you've made some strategic acquisitions in service lines like Profil and also your sourcing company based out of Shanghai, SourceHIT. How have these acquisitions amplified your ability to grow more organically than by traditional acquisition?

A little easier to navigate than what these two are going through right now with system integrations and whatnot. We had a little discussion over here on our Profill fulfillment business. We implemented a new warehouse management system that's pretty robust and challenging and whatnot. And we're not happy with what we're experiencing right now. And it's a bit of a challenge. So I can't even imagine what these two have to go through on a day-to-day basis, but It's enabled us to be a little bit more dynamic and nimble, implemented full integration in 6 months in both of those cases. So a lot easier to do it organically than a major acquisition in that case.

And question for any of you or all of you to answer. When you bring businesses together, culture can be the hardest part. What have you learned about making cultures mesh?

You two are looking at me. So they are looking at me, so I have to answer first. I think a couple of things. So one is Communication, right? It's key to our employees first and then to all you guys. We owe you to communicate regularly in this type of cases because you don't want to be left in the dark. So I think that's one piece that is, that is super important. The second thing is sit down with whoever we merge with and listen. It's super important. We learned with Imagine Brands a ton and we implemented stuff that they were doing on their side and that benefits the combined group. So we're doing the exact same thing with Gary Linez, sitting down with them saying, what makes them different, why our customers love us at Gary Line, and making sure that we blend that in into the combined entity moving forward.

Yeah, for us, and I know everybody just had a conversation on CX, like for us it was really reorienting the whole organization around the customer and communicating with the market about what we were doing, plans, the step changes that were coming to the way either business operated, but really rallying around the customer. And that's the thing that no matter what company you buy, you have in common. And rather than focus on particular service offerings or lines that were different, like, we wanted to build on the strength of having a unified desire to really service the customer. And so that sort of, that crossed all functions and was the glue that brought the two cultures together.

For us, it's fairly simple. We're just implementing a new line of service into our sales force and marketing team's arsenal. So a little bit easier. Again, I'm referencing them and I think it's really challenging bringing two sales teams together. You've got talented people on both sides and unfortunately you'll have to make a decision on, hey, this person's probably not going to be the greatest fit for the, for the overall organization. And I'm sure we'll be there one day. And that's a really tough battle to go through.

Pierre, given that you guys don't have an internally built tech stack, and therefore you are working with out-of-the-box ERPs, and I know Phil's in the audience, so he's going to fact-check me on any of these things. What were the hardest things from a technology perspective? What were the learnings? What would you do differently?

Oh, it's been a journey.

Of course it was.

He's going to fact-check me too.

So thanks, Phil.

Yeah, we've implemented Oracle EBS back in 2012 and We had our ups and downs, a lot of downs, but it's ultimately a great platform if you use it for transactional stuff and not for customers' interactions. So we tried as much as we can to pull out of the tech stack. We have Salesforce as our CRM and Phil and his team, it's not because he's here, but he built a fantastic order management system that is web-based, that is easy to deal with and a Koozie tracker that I hope everybody's using in this room, at least the ones that are dealing with us. And that it's like the famous pizza brand where you can see your order progressing through and you don't have to be logged in. You can clarify your order, you can go and invoice, look at your invoice, pay your invoice online. It's really sleek. But yeah, it's been a journey. It's been 13 years. So I was in Hong Kong at that time. Little anecdote, and when we launched Oracle in Clearwater, Florida, and in Hong Kong at the same time, and then was living in Hong Kong, and I spent the day at the maternity because my daughter was about to, to be born, and the night in the office to start the system. So I will remember that day for the rest of my life.

I'm sure your wife will too. All right, further on the technology question, what would each of you say, what's been the most impactful tech transformation you've made in the last 2 to 3 years?

I'll go there. I would say we're, we've implemented a POD platform where we're integrating with the likes of Commscue and other company stores to, to offer a POD platform instead of having to keep a million dollars on the shelf. That's been the buzzword in our world right now. That's been pretty successful and that's all homegrown. And I think that's been a, it's going to be a really powerful thing in the future.

About 6 months before we bought Alpha, we completed the pilot for in our Lockport, Chicago warehouse for a system called PopPick, which is a picking module that if you, I don't know if you've seen the videos of it, but it's like these Roomba robots that drive the shelves to the operator. And what it allows is, first of all, there's very few things in one's career, I think, that you get to work on that are like truly a win-win for the company, for employees, and for customers. Other than the fact it costs like $200 million. But so I guess it was a win for them too. But it improves order accuracy, on-time shipping rates, like really drives some of the key purchase considerations for everyone in this room. And then our workman's comp claims and safety issues are down like 70% year over year. So in the background, while we were doing the alpha integration, we rolled this out to all of the major buildings in our network, and it's just it allows for a level of service that you can't do in any other process. And what was cool about that was like the hardware came from this company, but all the software that drives where things are stored, what shelves they're on, what they're on a shelf next to, like all of that's written by us and leverages AI and different machine learning capabilities that we've invested in over the last 5 years or so. So that's cool to see that whole thing come together in something that's so high touch for all of our constituents.

We've seen that live and it's as slick as it gets. So kudos to you guys for that. It's really neat.

Perry mentioned one example that Phil's team built. Anything else you want to share?

Sure. Koozie Group, the Koozie Tracker, and Frank mentioned the buzzword from the last 5 years, AI, right? So I'm going to tag along this. So the second one, which we launched in September last year, so less than a year ago, is AI enablement tool for our sales team. And so basically connecting the dots between our product portfolio and helping distributors sell to their end users. So basically You come up with, oh, I have this, this end user Cadillac dealerships in this area. And our Gleam tool, sales, sales enablement tool will tell you what is the next anniversary, what you should be pitching as a product and so on and so forth. So we feel that it's going to be a true enablement to us being a consultive sellers with you guys and partner with our distributors, partners, rather than presenting you products and letting you do the work alone.

Speaking of AI, what other fun things have you guys got up your sleeve right now?

I'll go.

We're—

this is pretty cool. When you send us a proof currently, it's in a template. It's not really ever machine ready, right? So you'll send us, we'll send you a proof. It's a sunglass. And then we have to have someone extract that and put it in a print-ready file. We've now developed an AI tool that's automatically doing that and sends it right to the screen maker, laser machine, digital press, etc. We're real proud about that. In addition, this doesn't really apply to this room, but we're taking PDF purchase orders and using AI to get about 95% of the way there. Most of us send our orders to overseas, El Salvador, India, Philippines, etc. That's a thing of the past or will be a thing of the past. So you'll get quicker action. That's usually a 24-hour process. This is like a 3-minute process now. So speed and accuracy and It's pretty cool.

So for us, we're doing a bunch of different things on sales enablement as well. And I think that's really exciting because it drives growth for the whole category and makes everyone choose whether it's apparel or hard goods, makes us easier to do business with as an industry and hopefully drives more spend towards our overall category. A scarier thing that we just went through over the last couple years, but is really impactful. Is around our demand planning. We have 120,000 SKUs or something like that that we're stocking in 20, right now 23 buildings. So just making sure that we have exactly the right amount that you're going to order tomorrow where you are is a never-ending battle. But we basically, for the first thing was getting our data ready and cleansed in a way that ML model could actually start to do its thing. So as you can imagine, it's like, You get that really weird order, one-time thing that's 150,000 units. I'm going to buy it for next year. You're never going to talk about the sunglasses again, or whatever it might be. And so it's not rebuying stuff that we shouldn't be rebuying, and then it's also making sure that we have what you are thinking that you might sell or that your client might pick. So this thing dynamically sets forecasts by SKU, or by style, really, in our world., and then drops that down to a SKU, and then that drives the stocking decision so that we're at the lowest possible out-of-stock rate that we can be. And it's like the amount of additional conversion that we have by having the stuff in stock that you guys decide to sell that day, and then obviously freeing up the space on the balance sheet in the building by not buying random color of a college basketball team from rural Kansas that isn't gonna make it ever again. Every year for the next 10 years till someone figures it out is really important.

So from a sales enablement perspective, as each of you think about building out different types of tooling, whether it's AI, whatever might fit the need, how are you keeping in touch with what the needs are of the customer for that, of what we were talking about this morning in terms of customer experience, given that each of you serve a very wide variety of different types of customers and different needs. So how does that at the, in the roles that you're playing, how does that filter up to you from a decision-making perspective to understand what the customer needs?

We know because we talk to them quite a bit. So our sales team gives us a monthly feedback on what distributors are doing. I'm meeting you guys when I come to conferences and discuss with you where we heard loud and clear that they want access to the Glean tool that we've built, the AI tool. So Phil, thank you very much. Can you open this up to our distributors? Thank you. But yeah, I think having a self-service tool beyond what the sales rep, the Koozie Group sales rep, or inside sales can provide you guys is going to be the next step for us. I think that the next question is how, who do we partner with to have the breadth of products that our distributors need?

All right, switching gears to everyone's favorite topic these days, supply chain tariffs. So for those who've been to SKU Camp before and heard me do this panel, there's a theme every year that supply chain is a shit show, and it seems to be a shit show every year for some reason or another. So we're still in that category at the moment. To kick it off, how have each of you handled both personally and for your teams the enormous amount of uncertainty and change that has been going on with tariffs this year?

I know the three of us up here have been sourcing outside of China for many years. It's easy to do with textiles, cut and sew. It's a lot harder to do when you're dealing with electronics that have 22 parts that go into a power bank. We've tried to move out of China and then the other country that we moved to put the tariffs in a situation where they're a little bit higher. So you invest all this money and you work with folks in China that have moved to countries, I'll use this case as Laos, and now you've invested millions of dollars and you don't really have an advantage anymore. When you move out of China, the shipping lanes are longer, the supply chain's longer. It's, it's a very challenging process. In most cases in hard goods, China's still king. I think most of us invest pretty heavily in inventory in this group here, which enables us to be a little bit more dynamic in raising prices because we're still having to absorb inventory that we've had on the shelf for quite some time. But there is a scenario where price increases will happen and more often. I'm frustrated on how this industry works and we can't dynamically go SKU by SKU. For instance, if we carried a drawstring bag in 20 colors, We should be able to say the Carolina Blue price is this, the Black price is that, because we have a lot more inventory in that, we're not churning through it. Unfortunately, you or your clients don't allow us to do that, and I think that needs to change pretty quickly.

You dodged the question about how do you handle the stress.

I'll see you at 4 o'clock. That's somewhat real.

No.

I don't know. I have 4 young kids, so I don't know what's harder, that or dealing with them when you get home. Yeah, the stress is there and we embrace the grind. That's just part of our mantra.

Mike? Yeah. So for us, the tariff thing, we've really focused on diversifying our supply chains and we bought a business in 2021 that came with a pretty unique Mexican-sourced USMCA. I think it's one of those giveaway items for everyone here this week, but with Tultex and M&O. And so it's US cotton. It drives in a truck to Mexico. They're vertically integrated. So literally cotton comes in one side and a t-shirt comes out the other side. And it's not the most cost-effective place to make a t-shirt, which is why these supply chains over the last 20 years have moved to everywhere from Bangladesh to Egypt. I don't know what the other side of there—

yeah.

Like we, we deliberately have left money on the table in terms of supply chain optimization from a cost standpoint to have diverse supply chains for times like these. And it's like life insurance or car insurance policy that you're like, I hope it never has to pay off, but I have it if it does. And it's been nice to have that now because the most price sensitive programs can still get done. And, but I think it was in your question, the most disruptive part of this is just the uncertainty. Like we had on any given day, we're getting like 70 to 100 containers coming in for us. And so it's like we got to the border and they're like, do you have an account for a tariff? And I'm like, I don't think so. Do we need an account? They're like, we don't know. And they're like, all right. And then that was like Saturday morning. And then Monday it was like, oh, it's all good for 90 days. But like that part of it, I think the industry can actually absorb some level of cost increase, but it just, it takes time and your guys' sales cycle isn't just immediate. I think once we get to a more stable place, like I don't really view as cost, like cost increase, whether it's coming from tariffs or whatever, is like an existential threat to the industry. I think we just need to get to a stable place. And the more of the issue in my mind from tariffs is demand driven, whether that's consumer demand or corporate ad spend being cut to fund issues in other parts of their business.

So you two dodged the question on how you handle the stress of it.

I like to drink also, which I'm trying to cut back on. He's a sommelier, so we already know the answer there. No, I have two kids. I have a 9-year-old and a 5-year-old, and so I try to do active activities so I can keep up with them and love to mountain bike and surf and fish and be outside, sometimes with a beer in my hand, but not always.

So, I'll just answer the question about stress.

That's—

all right.

You can start with that. And then—

So, I passed my Certified Sommelier back in June, so I drank a lot.

Very—

by the way, that is a very difficult exam to pass.

It was stressful. It was stressful, specifically the hospitality section. So, you have to serve a table of 4 masters and do it the right way. And when I walk up, walk out the room after 16 minutes, I say, there is no way in hell I'm going to pass this exam. But I got it. Back to Tarif. Okay, that's boring.

So what's your favorite wine, Pierre?

Favorite wine? Many. Sample tonight. So, Terence, we're a little bit more insulated than CJ is, and as we— in fact, 55% of what we sell is domestically manufactured, right? So think about pens and/or Gary Line products, plastic products, bottles, and so on. But we have the same challenges that that it has, right? So we import mainly from China. We sometimes use the same factories. The Laos example is exactly what I was about to say. So yeah, it's, it's a challenge. We need to adapt. We do the exact same thing. We try to look at our inventory positions and soften the blow for our distributors. But yeah, at some point we'll have to increase prices and adapt. So we don't know how it's going to influence the product mix because the budget of your clients are not unlimited. But we'll see. So I think what brings that to light is supply chain before COVID was a behind-the-scenes thing, and now it's really important. Like you nurture the relationships with your suppliers, we do the same. The Chinese manufacturers have been friends, and CJ has spent more time in China than I even did for the last 20 years, and we have those relationships for 15, 20 years. And those people really matter to us. They are really friends. They have our phone numbers, and sometimes they call us, say, why are we not getting any orders? And we have to explain that, right? So it's a true partnership. And they are worried about the situation. They are the ones investing as well outside of China because they see the tariff threat as a risk to their business. So it's good to sit down with them, have boots on the ground. We have people in Hong Kong, in China, in Shenzhen, in Shanghai. To meet with those people on a regular basis to understand what their needs are, what their plans are. Gives us access to new products as well, innovation, because they are also innovating in our space. But yeah, getting close to them and make sure that we are partners is really important and very important to have a strong sourcing and supply chain teams out there.

And I'll add to that, sometimes you have to give these suppliers pity orders. And what I mean by that is you meet with them and You've been doing business with them for 10 years and they're showing you a bunch of junk and you're moving past them, but you never know when that supplier is going to have the next best mold or available product. So you got to give them pity orders. We'll take a couple pity orders from you guys too. But, but in all seriousness, that Pierre is correct. You have to have a relationship with many. We'd like to, we've really reduced our supply chain and number of vendors we deal with. But again, you never know when the next best product's coming up. So it's challenging.

So CJ, given costs are likely to rise, how do you do the dance around deciding how much you absorb, how much you pass along, how you forecast?

We do it as it runs out, and we're trying to do it quarterly now. We stayed the whole first 6 months of the year and didn't touch pricing one ounce, so we're pretty proud about that and had the cojones to have the inventory to support that. Again, what I just iterated, I think it's a It should be a SKU-by-SKU basis and not a whole category. I don't think we all need to raise prices 7% on things that you're not selling or absorbing. It's going to be for us a quarterly deal. The direct import jobs really stink. We do things the right way. We don't go DDP where the China vendor declares it at 10 cents when it's really a dollar, which a lot of importers do, unfortunately. So That's a hard one. We had a 300,000-piece ceramic mug order that was at 2% duty originally, and it went up to 145% when they delivered it. Yeah, so that was a fun phone call. Hey, would you like to pay an extra $226,000 on your order? And they did it because they needed it. It was an on-pack for an event. Those are some real-life scenarios that are occurring, and I'm not trying to push for suppliers to get that business, but it's a lot safer for us to do that versus you taking the risk in that scenario.

Frank, given S&S's vast distribution footprint, how do you balance speed, cost, and resilience in an uncertain environment?

So for us, it's cost is a very distant third. Like every shipping lane, every carrier is managed by zip code, on-time delivery rate. And so we open buildings to make sure that we can provide the service level that we want to provide with the cutoff times we, we like you all need. And then it becomes a different guy's problem to figure out how to like not lose money doing it. But like everything, as we have built density, like when I started S&S, it was a single location in Chicago. So if we, the power went out or whatever, it didn't matter if you were a mile away, we were dead in the water. As we've increased density, we have 2 or 3 DCs covering each market. And so that like, We have the luxury of having more resilience as we've scaled, but it's all about being able to pick fast and accurate and get it to you as quickly as possible.

So shifting gears a little bit to the topic of culture. Pierre, you've worked in both European and Asian environments. What learnings did you bring from those experiences to how you shape the culture at a Florida-based company?

So first, wear a mask when you're sick. That's Asia. What was the question again?

How has your European background and your time living in Hong Kong kind of shaped how you, what culture you brought to Koozie in Florida?

I don't know if it's European or if it's common sense, good common sense, right? So we heard a lot of the speakers today speak about this. So it's common ground to say you listen, you do the right things and so on. If I have to speak about my own experience, I'm a grinder. I used to dig data and do that 12, 15 hours a day because this is what my passion was and doing that at every level of the organization. What you learn as a CEO is to empower people. It's to remove roadblocks. So I'm just— I'm not giving directions anymore. I'm just removing roadblocks and listening to the ideas that the team has. And this trickles down into the entire organization. So we need to instill trust within our supervisors, managers, directors that they are doing the right things and correcting course and helping them succeed. So I think that's— would say it's a big piece of the culture change, right? So, and trying to instill— sounds common ground and very cliché, but putting the customer as they're at the center of everything we do. So we installed about a year ago, every Tuesday morning we meet for 1 hour with a team and One out of two meetings, we listen to a customer's call or two. It's very humbling sometimes, but great feedback at the same time.

Frank, how have you had to evolve your leadership style going from a CFO, COO role to now CEO of a many billion dollar company?

Yeah, that's an understatement. So when I started, like, I started my career in investment banking, and then I went that's when I met the S&S owners at that time, like in 2006. And I went to go work for a private equity firm for a year and a half, and then they hired me to come and execute this national expansion plan in '09. So coming from like the kind of private equity investment banking world to a real company with real normal people that aren't— I'll just leave it at that. It was like you have to get people excited and rallied around the customer and what you're doing every day, not just driving a transaction or driving a specific investment objective. So it took time to recalibrate to how you motivate people and understand the, like, human side. I don't know if part of it too is I was like 24. So I think there was like some broader maturity that happened in the background, hopefully, or at least somewhat. Now, like, the things I'm doing every day are so different. And it's not— I don't ever— I don't know. I say it's real work. I would love to just open a spreadsheet and be in there. But I don't even get—

That's easier in some ways, right?

Oh, way better, yeah. No, not better, but easier. But yeah, now I purposely don't carry a laptop when I travel so that I don't do things that I shouldn't do, which sounds ridiculous now that I'm admitting this in public. It's true. Like you'd otherwise, you know what it's like, you just get it. I used to sit in the call center because I wanted to hear those calls all day long and then I'd be like, all right, I'm gonna spend my afternoon with like a $25 credit issue. And because you want the customer to have the right experience and what you just heard is outrageous from your customer service person and you just get sucked into the lowest problem that's going on versus like actually managing and inspiring people to care about the customer and make the right decision for the customer, even if you're not on the floor at that particular moment.

So CJ, there are a lot of next-generation folks here in the audience today, a lot of family businesses. You have— what learnings can you share about having grown up in a family business and then taking the CEO reins?

Sure, the easiest one, and Joel kind of talked about this earlier today, is you have to know your people. You have to go ask them questions. How's their family doing? How is your cousins playing for University of Toledo? How'd they do against Kentucky? Blah, blah, blah, blah, blah. Not blah, blah, blah, but really engage in what they are, they think of you and be a leader and really care about what's going on. So my dad was, walked every factory every day and he's instilled that in me. I try to do that when I'm in town and get to know the people, but you also in that role, you get to see what's going on. And he had a good line. There's no eye like an owner's eye. You can just point things out that others don't see, and sometimes that's yelling, and sometimes it's very polite and saying, why are you doing this? Why? That was probably the best thing he instilled in me. And in addition, we like to have fun at our company. We like to go out and have a good time, but also I say play hard, work harder. So that was one of his mentalities and something I adopted.

And I have walked the Hit Factory floors with CJ many times and have always been blown away by the fact that he knows everybody's name that we've walked past.

And I will add to that too, as I've gotten older, like the world matters a little more. And I had a great experience with Mark and David on, on our water tower build. And for you guys that aren't donating to that scenario, start doing it, please. It's a super experience and it echoes the ethical scenario where certain factories aren't drinking, like we can go right now and get a bottle of water. They can't do that. So I've grown into that world where that's super important to us, and I think it's pretty cool.

So before we unleash the audience upon you guys, I want to do one thing that we have done on this panel in the past is let you guys ask a question of each other.

I don't have questions. I have admiration for both of these guys. I think the, the both their acquisitions this year were really structured well and will benefit all of you in the room and our entire industry with Pierre and Gary line there. We have a factory that's literally on the same road and Gary line's building is in the same office center as our major warehouse. So we have good relationships there and it was a brilliant move for a USA-made deal. And then Frank with the Alpha move is awesome. Now you have realistically, and sorry if I'm offending anybody else in the room, but you have two major sources for your apparel and it makes it, it makes your guys' job a hell of a lot easier. So really cool stuff that they're doing.

That's awfully kind of you to give compliments, but you still gotta ask them a tough question. Or you can think about it when they ask you a tough question.

Yeah.

Uh—

Pierre's ready.

I have one. Go. So Frank, what are you gonna do with Primeline? Ooh.

So— To repeat that, the question was Frank, what are you gonna do with Primeline?

Yeah, we like the hard goods space. It's a huge market. It's the way that it was integrated with AlphaBroader. Didn't make a ton of sense, as everybody in this room experiences apparel and hard goods. So it was one of those things where it sounded really good on some guy that shouldn't be traveling with a laptop spreadsheet, but in actuality, it's not how the world works. So we've split it out from a kind of commercial perspective, and it's had a really good year. Like, it's one of the bright spots of our business right now. We recently got agreement with Yeti, so we have exclusive Yeti distribution, which has been super exciting. So no plans to sell it or anything anytime soon, but there's always a price for everything. No, but seriously, I don't see us selling it. I like— I think it makes sense.

Thank you.

You got one for me too, or what?

Yes. How do you manage phone calls from customers at 6 o'clock in the morning and 10 o'clock at night with 4 kids?

It's just, it's part of the DNA. It's just what—

I admire you, man.

It's what we all, our whole team does. We talked about the customer experience. Still, it's frustrating when members of your team can't have the same mentality, no matter how much you ingrain that in them. And customer first, always. That's our mentality.

Go for it, Frank. Ask him something.

What do you think the biggest driver of growth for our customers is over the next 24, 36 months?

Great question. If you skip to 2 years from now, I think POD, print on demand, is going to be a larger portion of everybody's business in this room, no matter if you are a supplier or distributor.

The hardest part is us all having backbones to talk to our end user and tell them what's really going on in the world and being very truthful today and 36 months from now. These are not fun conversations. I brought up the one with the $225,000 phone call that someone's got to make, and that was me in that case. But yeah, we just got to be a lot more truthful with what's going on in the world and how dynamic it is, and it can change on a dime.

You sure you don't want to ask them a question?

I have to be nice to him because I'm buying a lot of stuff from him. Pity orders. Yeah, pity orders.

You and I got to talk after this.

Yeah, no, I know what Pierre went through and I don't want to give any hard time right now. Yeah, what was the hardest part of the ERP part of merging companies together? And we've talked offline on this and Frank's told me patience, and it's very hard for all of us in the room to have patience, but CJ particularly is very patient. Yeah, not so much, but growing. Yeah, what's the hardest part about merging major companies together? We bought, we purchased smaller and then we just roll them up.

But yeah, I think the system part of it, it's like you want to move really fast and it's easy to recreate what already existed at one of the two companies, but to stop and try and make something different that, so you have to make 1 1 3, otherwise it's not worth doing an acquisition. And so the system, the way you're solving for customers' problems is what drives that magic from any acquisition. So. Just being disciplined and not being like, all right, this is— I'm trying to get from here to there, I'm going to go fast and straight at it. And sometimes you might realize you actually want to be over there.

Yeah, it's a great question.

The—

we need to look at risks and benefits, right? So every time we do this type of integrations is, are we going to serve better the community or not? So I would not have had any problems staying in two different systems if we didn't see a benefit. But on the flip side, bring in whatever is done on both sides to bring the best of both worlds. So the example, Imagine Brands, when we bought Imagine Brands in December 2020, it was— took us more than 3 years to integrate them because we wanted to take our time. But they had a very slick way of displaying orders that were due the same day or due the next day so that the operator on the floor will see immediately what they had to work on. We brought that to Koozie Group because this was a game changer, right? So every site director at Koozie Group was visiting Imagine Brands and said, I want the same thing. So ideas are everywhere and they are, they spark from every interactions that we have with employees, with supervisors on the floor, and we need to be listening to be able to take those and bring them to a better newer system.

All right, your guys' turn. What questions do you have for these guys? Michelle? What do you think Q4 is going to be like?

I think we had ample time to prepare for this. As we said, we have diversified supply chains. Our vendors are pretty nimble if we do get larger situations and we need you, we have the ability to work with our vendors overseas to produce overseas air in those scenarios, right? I don't think inventory is a major issue like it was in the COVID era. So I think we're in a good spot and pretty optimistic over the past couple of weeks. I don't know about you guys, but been pretty good on, on order count and volume. So I think we're trending in the right direction. There's a little bit of certainty going on.

Yeah, I agree. This was a lucky time for us to have done the Alpha acquisition because we have more space than we would have normally had. So as all this uncertainty came up, we bought a ton of inventory, some of it before price increases, but certainly like a lot through the summer when we were already experiencing higher price increases because we expected there to be some level of disruption. And I think that our supplier partners have done a good job of moving their supply chains around, but we have a cushion that is pretty significant. So I feel— I don't think our problem is going to be inventory the way it was during COVID Yeah, I would concur with that.

No inventory problem. I was in Red Wing a couple of weeks ago. For our annual picnic with the team, and site director was very proud to tell me he has 53 incoming containers, inbound containers for the next 3 weeks. So won't have any problems there.

Daniel.

There you go. My question is about Gary Line. When we lost the New York facility, it was a gut punch for my distributorship, especially as somebody in a company that cares so much about unions. I'm wondering just a little bit about the backstory. I'm wondering if you can comment, Pierre, about was that an easy decision or a hard decision? Was there any thought given to continuing production in New York to any extent? And has that had any kind of impact long-term on the company culture at Gary Line?

Sure, great question. Yes, so Gary Line was in the Bronx originally, and so Mill Point Capital, who's now the owners of Koozie Group, bought this company in December 2023. So it's a— it was a family-owned— it's still part family-owned, the Hellinger family. Richard is a member of the team still. And so the long story short, I will tell you it's not before my time, but it was, they had to move, right? From a bunch of reasons, mainly driven by the family. It was family affairs, so they had no choice but to move out of this building. We acknowledged that it was a big disruption. We lost the union in the Bronx, so it wasn't unionized. Factory and they moved to Florida, but that was certainly not the, the reason for the move.

We've got unions in Florida, right?

I'm joking.

This is a question for all of you, but excuse me, Pierre, you brought it up in terms of like the factory, new product innovation. What percentage of new product innovation is driven by the factory kind of wanting to inspire innovation and new products, and what percentage is driven by you, their customer, from feedback from us or broader consumer trends, maybe in markets that you might know better than the factory?

Great question.

I think it's category dependent. If you think about the bags category, whatever you call it, soft goods and so on, we can be very innovative. With materials, with color blocking, and so on. So the product innovation team is really good at creating those and bringing the concepts to the factories. When it comes to pure hard goods, there is more of an element of our suppliers innovating and showing new designs, scrubbing the trends, Kickstarter, Amazon trends, and bringing that to the table. So as CJ will concur—

If they add a phone stand to an electronic product, basically that's the new thing ever. No. And for some reason everyone likes it, or googly eyes. I can't understand that product, but anyways, no, it's a lot driven, but we all have pretty extensive product development teams that are going to various shows in the States or in Europe. And I would say 70% the supplier, 30% your vendor.

With the acquisition of Alpha, you shut down the in-house decoration. So I was curious, is there any plans for S&S to do that in the future? Yeah, so the problem that Alpha was trying to address is around this kind of single invoice solution, which makes a ton of sense and makes apparel as attractive and easy to do as hard good, for example, that's coming decorated. About 4 weeks ago, we formed a strategic partnership with a company called Fast Platform, which, you know, allows us to have a front end or an API integration into different softwares and stores. To allow decorated apparel. Like, we— half of our business is promotional products distributors, half of our business is decorators. And so we don't want to be competing with our decorator customer base. It's also not as easy as you'd think, as easy as he makes it look, to decorate. No, sir. So for us, like, we wanted to take advantage of our spot in the supply chain to construct a network that connects The two sides of our business together, and it allows us to load balance capacity, to have really specialized decorators doing really high-end small jobs, doing— there's volume, lower quality shops, there's people set up for that. And we view ourselves as in a spot where we can connect all of that and still get you guys the order experience that you need and shorter order times and a whole bunch of other things that are pretty cool.

And when did you think—

when do you think that will launch? So we, it's live now. Like we just, it's gonna, the big like coming out party of it will be in January, but it's up and running. And like we had our show last week that we had it demoed and it's a pretty impressive solution.

One more question. Print on demand, at what point— It's a necessary evil right now versus profitable.

Yeah.

And it will be for a long time. But those, the small orders lead to the big orders. You gotta do. We gotta take the crumbs sometimes, and that's what that is. And every negotiation we have in that, this guy can do it for me for $4.50 and you're charging me $5, and we're really talking about 50 cents on a one-piece shirt. And that happens day to day. That's a constant conversation. We're working on some cool things with someone here to make that streamlined too on the POD side of things. And I'm paying, we'll be paying more for shirts to do that., but the process is better. So we're— That's good to hear. Yeah, you're welcome. We're cognizant enough of that to say, hey, I'll pay an extra 50 cents on the shirt to make the process better.

So just to piggyback on that, I think if we think about what print on demand enables in terms of the market that we're all addressing, like that's the really exciting part. Like people will choose to do something that would never— a program that would never have gotten done. That, or a job that would never have gotten done, or money that would've been spent on some other form of promo that now the capability to profitably or somewhat profitably, profitably or someday profitably do those small jobs. Like that's what the unlock is. And so as you look across like things that can drive this category to grow, to me that's the most exciting thing because consumer preference wants customized, bespoke, interesting things like So we need to have a solution in promo that enables that. And I can't think of another one other than print on demand that will really pull, like the broader US apparel market's $300 billion. Like our little segment of it's, depending on who you ask, somewhere between $10 and $40. So if we can carve away and, and shirts or outerwear or whatever is gonna be super customized in a really high quality professional way, that's what will make all of us dry.

Grow and drive this industry forward for years and years. And I'll add to that, the most challenging part of the print on demand is there— these platforms are a dime a dozen. There's a new guy that comes out that everybody thinks the coolest new company store platform, and it's impossible to integrate fully with them. That's a real big challenge. So once we saw all this and you utilize the tools that they're developing for you within that print on demand world,, it can get a hell of a lot easier. Today, from a supplier perspective, super challenging because we got to beat to your drum and go, hey, I chose to use X platform and I'm using Y and I'm using Z, and we have to fully integrate and spend our IT resources' time on that when we can just do it with one if we really wanted to.

With that, we're going to wrap up. One of the things that I have always found magical about this industry is the fact that you can have competitors who also have great friendships and mutual respect. So thank you for the vulnerability and all the L that you shared today and your perspective.

Thank you, Cameron. Thank you.