Arete Management Reports on Status of Arete Outdoors
BOULDER, Colo., Nov. 9 /PRNewswire/ -- Arete Industries, Inc. (OTC Bulletin Board: AREE) Management issued its report on the current status of subsidiary, Arete Outdoors, detailing progress in five key elements of the value chain namely, product development, manufacturing, marketing, sales and customer service and support.
Since the new management team was assembled in May of 2000, the development of Arete Outdoors has gone according to plan. Arete Outdoors is launching the company with the introduction of two products for the upcoming winter season of 2000-2001.
These are:
1. The SnowFangs(TM) snowshoe, a truly revolutionary product which promises to create an entirely new sport out of snowshoeing.
2. The Powder (Winter) and Dirt (Summer) RUSH Downhillers(TM), which are gravity scooter-type bikes for use on winter and summer slopes and terrain parks at ski areas and elsewhere. I
n Management's opinion, these products were the most ready for production and marketing out of the Company's portfolio of products and would set the standard for the kind of innovative, brand-leading image we intend to develop for years to come.
The Management Team's challenges include developing and executing a marketing plan that would allow us to immediately break into the outdoor winter sports market. We are tackling this task by building key relationships with winter ski and sports resorts along with developing a team of professional sales reps to access traditional retail channels.
Relying on these traditional channels as well as in-house sales efforts, our AreteOutdoors.com website is being re-engineered to function as a vehicle that will create interest for our retail and rental programs. We are also aggressively pursuing this strategy on a worldwide basis in North America, Europe and Japan.
Another challenge of the team is coordinating our in-house design and engineering with outside manufacturing to quickly bridge us from product development to production. To meet the challenge, the RUSH products are being manufactured in Taiwan by Asahi, a third-party bicycle manufacturing facility. Our custom ski-boards for the Powder Rush are being made by A-Sport Manufacturing in Washington.
The Dirt RUSH(TM) uses the same frame and converts easily from the Winter RUSH with off-the-shelf components such as mountain bike handlebars, suspension, brake and wheel systems. Our patent pending SnowFangs(TM) snowshoes are made from components built to order in Colorado and we are currently assembling the components at our Berthoud, CO, facility.
The challenges faced with introducing totally new products into existing markets and creating entirely new markets with our RUSH are tremendous opportunities to generate substantial revenue. However, the team is focused on the immediate goal of generating sufficient revenue to sustain our ongoing product development efforts with new products to fill out a winter product line.
Since May of 2000, we have gotten ready for the product launch this winter. This entails first preparing and submitting patent and trademark applications for our proprietary design innovations, building and testing prototypes and getting user feedback. With the Rush products, we were very fortunate to gain early acceptance by Copper Mountain Ski Resort, owned by Intrawest Corp., for this winter season.
We have demonstrated our products at other resorts owned by Intrawest such as Mammoth Mountain and Whistler/Blackcomb, as well as other interested local and North American Resorts. Our Winter Rush must be presented to each resort in North America and Canada, and we must gain acceptance by ski area management for use on the ski slopes this winter.
Our summer version will not require the same level of personal selling to achieve mountain acceptance because they are similar to Mountain Bikes, which are currently allowed on most areas in the summer. Likewise, since there are competitive devices with similar features already allowed on slopes in Europe, we have a significantly lower barrier to entry there.
We are building 125 winter rush products to be delivered from mid-November through December for area demonstration and placement in ski-area rental shops. We are building 500 pair of our SnowFangs snowshoes for delivery in November to be used as samples for our sales reps, for demonstrations and placement in resort rental shops, trail crews, ski-patrol, rescue applications, etc.
This winter, the company is co-sponsor of the Ouray Ice Festival, held in January in Ouray, in the heart of the San Juan Mountains near Telluride, Colorado, where we will be running a snowshoe competition to complement traditional ice-climbing competitions. This event has been promoted for several years by Jeff Lowe of Cloudwalker, which has come to draw international attention.
We plan to hold promotional events in the Spring of 2001 to promote our Powder RUSH in exhibitions at scheduled Border-Cross events. We will also develop a team of riders to travel to ski-resorts to put on demonstrations and promotions throughout the upcoming ski-season.
To expand our winter product line, we filed patent applications in anticipation of prototyping our new revolutionary PowerPole concept for back-country and cross-country skiing. Also, we will soon be filing a second patent application for our new suspension system for skis and snowboards, for sale next ski season.
Our RUSH product line will be expanded to include a full suspension Professional Dirt RUSH. Our focus with the RUSH Products, PowerPole, Ski Suspension system and the SnowFangs is to pursue the ski area industry niche through their pro-shops and rental facilities with exciting, all-new recreational opportunities to create new sports and to bring the aging baby-boomers and echo-boomer population back to the resorts.
To further fill out our line, we are exploring distributor relationships with specialty manufacturers from Europe and the US to market complementary products and accessories such as back country ski-poles, helmets, pads, and apparel.
The company is actively pursuing a full-time sales manager to develop and manage a professional sales representative team to sell all Arete Outdoors' products together with unique third-party products. Presently, we have a non-exclusive agreement with Jeff Lowe's Cloudwalker to market the SnowFangs to high-end outdoor stores in cities and resort areas in the current season, which evolves next season into a private label agreement with Cloudwalker for a high-performance mountaineering version.
We opened a European distribution facility to be operated by Martin Bader, an established distributor of mountaineering equipment in with territorial reach to Switzerland, Germany, Italy and Austria, along with the Benelux countries. For the RUSH products our prime directive is achieving ski-area acceptance and developing a rental/lease program with ski area rental facilities, which program to date has been operated in-house on an area by area basis. We are planning to supplement this effort with a direct sales/guerrilla marketing program designed to introduce the RUSH to over 50% of the ski resorts in the US and Canada to the company's products.
All in all, we are very excited about our product opportunities and our ability to continue to develop trail-blazing products, which are of high quality and value. Our goal is to offer products which address the changing needs of the outdoor adventure enthusiasts, the weekend warriors and the kids (aka X'ers and Y's), all of whom will benefit from our panache for making innovative, high-performance gear and equipment.
We are also pleased with our progress in growing Arete Outdoors into a fully functional, autonomous business unit. With our first product offerings about to enter the market, we anticipate generating revenues, which will sustain an independent management and an operational team to further drive R&D, product development, manufacturing, marketing and sales.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements contained herein which are not historical are forward-looking statements that are subject to risks and uncertainties not known or disclosed herein that could cause actual results to differ materially from those expressed herein. SOURCE Arete Industries, Inc.
11/09/2000 /CONTACT: Thomas P. Raabe, CEO of Arete Industries, Inc., 303-247-1313, ir@areteindustries.com; or James Stock of Stock Enterprises, Inc., 702-614-0003, ir@areteindustries.com, for Arete Industries, Inc.
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