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K2 Corporation (K2 Sports) -- a History

HistoryLink.org Essay 3901 : Printer-Friendly Format

This history of the Vashon Island firm K2, manufacturer of fiberglass skis, and later of snowboards and in-line skates, was submitted by Andy Luhn, marketing director of the firm. Company founder Bill Kirschner was an inventor of a fiberglass ski in 1961. (But the first fiberglass skis were being manufactured in Switzerland by 1958.) In 2006 K2 changed its name to K2 Sports and moved from Vashon Island to Seattle.

K2 -- An American Business Legend

K2's early history has all the elements of an American business legend: modest beginnings, rapid expansion, and an excellent product with a worldwide reputation.

The legend began in the days following World War II, when the Kirschner family was doing business on Vashon Island. Kirschner Manufacturing produced splints and animal cages utilizing reinforced plastic. They became a leading manufacturer of specialized research cages, but the Kirschners were always looking for new products to build.

In 1961, using a pair of borrowed skis as a pattern, Bill Kirschner made a pair of fiberglass skis. They worked so well that he considered producing them commercially. He took his concept to Anderson & Thompson Ski Company, a Seattle-based distributor of ski equipment, and his "concept" came to life becoming the bare essentials of what K2 is today.

It was not until 1964 that Kirschner Manufacturing actually delivered any skis into the market and that was only 250 pairs. The following year it was 1,600 pairs and by 1967 it seemed obvious that this ski business could stand on its own. Bill separated it from Kirschner Manufacturing and named the company K2 (for the world's second-largest mountain and for the two Kirschner brothers, Bill and Don).

Within another year, K2 was selling 21,000 pairs of skis and the company's small payroll had grown from a single machinist to 83 employees. K2 separated from Anderson & Thompson and began to establish its own distribution and marketing channels, and a new marketing direction to make not only intermediate skis, but to develop a world class racing ski as well.

This challenge brought a pair of prototype competition skis that would change K2's entire development direction. Developed by K2's engineers, the new racing ski finished first in a World Cup giant slalom that year. It was the first World Cup victory ever on American-made skis.

The new K2 skis created a sensation with their looks as well as their performance: red-white-and-blue stripes provided an instant contrast with America's previous market leader, the all-black Heads. With the publicity surrounding the World Cup victory, the K2 ski sales went wild. The company doubled its shipments every year between 1966 and 1970.

In late 1969, the company's rapid growth required new capital and Bill Kirschner decided a well-financed partner would be necessary. The company was acquired by the Cummins Engine Company of Columbus, Indiana. Then in November 1976, the company was acquired by a private group of Northwest investors. The group, called Sitca, purchased K2 and its subsidiary, Jansport. James Garrison was named president and chief executive officer.

In 1982, company management purchased all outstanding shares of Sitca Corporation from this group of Northwest investors. Management decided to concentrate all resources on the alpine ski market. It sold its Jansport subsidiary, distribution subsidiaries in Canada, France and Austria, and majority ownership of the Swiss subsidiary.

In September 1985, Anthony Industries, Inc. acquired 100 percent of the stock of Sitca Corporation. Anthony, a NYSE company, develops and manufactures products for leisure and recreational markets under such popular names as Shakespeare and Pflueger fishing tackle, Anthony Pools residential concrete swimming pools and swimming pool equipment, Hilton brand bowling shirts and athletic jackets, Shakespeare marine and CB antennas and monofilaments, Stearns personal flotation devices, ProFlex mountain bikes, and also supplies the building, commercial and industrial markets with such well-known products as its Thermo-Ply insulative sheathing. Anthony Industries is based in Los Angeles.

Acquisition by Anthony Industries allowed K2 to expand and modernize production facilities. It also focused K2 on using "Employee Involvement, Just-In-Time Manufacturing" techniques, and Statistical Process Control to improve its products and services so as to better meet the needs of its retailers and consumers.

Started in 1988, snowboarding is a strong, more recent growth category for K2. K2 has become the most successful ski company involved in the snowboard. In addition, they pioneered the variable width theory with the release of the Fatbob board.

In April 1989, K2 Corporation acquired Madshus A/S, which is located in Biri, Norway. Production of Madshus cross country skis continued while K2 converted a major portion of this factory to produce alpine skis. Alpine production began in early 1990 to supply skis to markets worldwide. Further production advances were made by K2 in 1993, when it retooled its Vashon, Washington, factory to allow for production of a full cap ski line. The effort resulted in an award-winning line of 1994 skis for K2 which is now headed by new president, Richard Rodstein.

In 1993, K2 also launched its new Exotech inline skate offering. The successful launch introduced soft boot technology to the burgeoning inline skate market. In one year, K2 became a major player in the skate industry, extending the brand's year-round presence in the sporting goods retail channel. In the case of skates, as well as snowboards and skis, K2 has combined innovative product with a colorful, irreverent brand personality to achieve and maintain consistently strong market share and name recognition.

In 1995, K2 Snowboards introduced the all new step-in binding system called "Clicker." This revolutionary product has the feel of a conventional freeride or freestyle set-up. In the fall of 1995, K2 Skis introduced the K2 Four, the first ski with a brain. The ski, which utilizes "smart" material to counteract edge-perturbing vibration, is complimented by an all-new, deep-dish sidecut that optimizes ski performance and versatility. After receiving a gold medal for performance innovation from Popular Science Magazine in 1996, The K2 Four went on to become the #1 selling ski in America for the 1996/1997 ski season. Continuing on its winning streak, the Four was awarded the 1997 Snow Country Innovation Award at the SIA show in Las Vegas in March of 1997.

Currently, all divisions of K2 Corporation hold leading positions in their respective industries. K2 Skis was Number One in the U.S. in terms of market share (profitability and dealer confidence) in the 1996/1997 season. K2 Snowboards continued to rank in the top five brands in U.S. snowboard sales volume, and K2 In-Line Skates has consistently improved their market share from its introduction to place in the top three brands. Olin, which was purchased six years ago, is the Number One margin brand and the highest ranking brand in dealer confidence.

Sources:
Andy Luhn is Marketing Director of K2 Corporation. "K2 To Close Vashon Office, Moves To Seattle" Press Release, Transworld Business, June 22, 2006 (http://www.twsbiz.com/twbiz/industrynews/article/0,21214,1207207,00.html).
Note: This file was corrected on January 24, 2005 and updated on November 30, 2006.


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