BOULDER — Demetri “Coup” Coupounas and his wife Kim, co-founders of now-defunct outdoor retailer GoLite, are resurrecting their old product line under the new brand My Trail Company, seeking between $500,000 and $1.4 million from investors in a direct public offering.
Coup Coupounas began soliciting a customer email list of about 142,000 people last week in search of investors. The goal is to raise the first $500,000 this year and begin selling products online, with an eye on opening the company’s first retail stores along the Front Range in 2016.
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GoLite, formally Coupounas LLC, was founded in 1998 and became noted for its technical gear such as jackets, backpacks, tents and sleeping bags. But saddled with leases on stores that proved too large to be sustainable and a product mix that had grown too broad, the company filed for bankruptcy last year. A Denver judge dismissed the bankruptcy case in March of this year after completion of a liquidation sale in December that yielded enough cash to pay off the company’s secured creditor but not enough to pay off the nearly $6 million owed to unsecured creditors, including a long list of suppliers and landlords. Coupounas said he paid $5,000 for the remaining GoLite intellectual property and product designs.
Coupounas said the new model will be to focus on the core products that the company did well with, such as tents, backpacks and rain gear — and eliminating non-essentials such as casual wear. My Trail’s plan will also be to open smaller stores in the 1,200-square-foot range rather than some of the 4,000 and 5,000-square-foot stores that ultimately failed under the GoLite flag.
“The main two things that we’re doing differently are the things that cost GoLite so dearly,” said Coupounas, who is CEO of My Trail.
Another shift for the new company is the addition of a board of directors, something GoLite didn’t have. In addition to Coup and Kim, board members include Anne Maleady, whose background includes experience at REI and Eastern Mountain Sports; Geoff O’Keefe, who brings executive and senior management experience with companies like American Recreation Products, Lowe Alpine Systems and Patagonia; and Tom Vogl, a former senior vice president of marketing for REI. Former GoLite retail director Kale Klontz, meanwhile, is onboard as chief operating officer.
My Trail’s DPO, according to promotional documents, is offering up to 280,000 shares of non-voting, non-convertible preferred stock for $5 per share to investors in the state of Colorado only. The minimum investment from unaccredited investors is $1,000, while the minimum for accredited investors is $5,000.
The shares will earn 10 percent annual dividends, which will, at the board’s discretion, either be paid out annually or accrued over time and paid upon liquidation of an investor’s shares. After five years, investors can require My Trail to buy back their shares at the original purchase price plus any accrued but unpaid dividends. After 10 years, My Trail has the right to buy back all shares under the same terms. Investors will also receive 20 percent off the purchase of My Trail gear.
Coupounas said $500,000 will enable the company to order product, set up a headquarters and warehouse somewhere in Boulder County, and begin selling online. Once $1 million is raised, the plan would be to open two to three new stores each spring and fall, with Boulder, Fort Collins, Denver, Lakewood, Centennial and Colorado Springs among the first targets for stores. Coupounas said it’s likely that the first dozen stores would be opened in Colorado before expansion to other states.
Coupounas said some of GoLite’s smallest stores like its former Denver and Fort Collins locations were its most profitable, and that will be the model going forward.
As bankruptcy proceedings were ongoing last year, Coupounas had sought investors to keep GoLite afloat. But those efforts failed.
Retaining the GoLite name was also not an option. The GoLite brand was sold by Coupounas to apparel retailer Timberland in 2006 and then licensed back. After Coupounas filed for bankruptcy last year, Timberland terminated the licensing deal.
But Coupounas had hinted on GoLite’s Facebook page in March that a new company was on the way. Coupounas asserted Wednesday that GoLite’s failures came not from a lack of following for its core products but in strategic mistakes. He said another advantage this time around is the customer list of 142,000 people and their purchase histories and preferences.
Coupounas and his wife are the only common stockholders in the company, along with a trust set up for their son. The couple has so far invested $120,000 of their own money in the new venture.
“From a straight business analysis, you look at it, it’s crazy not to take these assets built over a long period of time and put them to work intelligently with the 20/20 hindsight we wish we could have had with GoLite,” Coupounas said.
Coupounas acknowledged that some former customers and potential investors will be soured on My Trail because of the GoLite bankruptcy and the way things ended for that company. But, without naming specific companies, he said he’s also got former suppliers who are interested in working with My Trail.
According to the website where My Trail is offering the preferred shares, only $4,500 from three individuals has been invested so far. Coupounas said that amount is higher now, though he’s waiting for checks to clear before he posts the updated amount. Currently, invested funds are being held in an escrow account. If the minimum $500,000 isn’t raised, that money plus interest must be returned to the investors under terms of the DPO license.
Coupounas said he isn’t sure how he would proceed if the fundraising falls short.
“I haven’t given that a second thought,” he said. “I’m planning on raising $500,000, and then I’m planning on raising the rest.”