Muskegon, Mich.-based kayak manufacturer KL Outdoor is back in business and riding a wave of pandemic-enthused paddling with 64,000 kayaks produced in the last four months and orders in hand for 32,000 more.
A newly formed business entity called KL Cos. Inc. acquired substantially all the assets of KLO Holdings LLC in June and has been operating it as KL Outdoor, an iconic name in the recreation market.
Founded in 1982 and based in Muskegon since 1989, family-owned KL Outdoor LLC became one of the biggest names in water sports with brands such as Sun Dolphin, Evoke, Future Beach and Terrain.
The company was sold in late 2016 to a Detroit-based investor group, which then sold it to the Boca Raton, Fla.-based private equity group New Water Capital LP. New Water Capital then merged the company with kayak producer GSC Technologies Inc., which is based in Montreal, to create Hemisphere Design Works in 2018.
Hemisphere Design Works claimed to be world's largest maker of kayaks with a market share of 30 percent through its brands, which also included canoes, pedal boats, dinghies, paddleboards, fishing boats, hunting blinds and sleds.
However, in late 2019, Hemisphere Design Works abruptly shut down the Muskegon operations and laid off at least 68 employees who had been rotational molding and thermoforming sports recreation products at two of the three facilities in the city. The company said in a news release at the time that it was seeking capital to avoid closure after a term lender would not provide additional funding.
The layoffs began Oct. 29, 2019, the same day the state of Michigan was notified that KLO Holdings, which did business as Hemisphere Design Works, would close by Dec. 29.
Laid-off workers told the Muskegon Times in a story published Nov. 1, 2019, that Hemisphere Design Works had lost a significant contract with Dick's Sporting Goods, which contributed to the financial problems.
Then, in January, 42 employees at the third plant got layoff notices to take effect by mid-April.
City officials are relieved the closure was relatively short-lived. In June, KL Cos. acquired what assets were left from the liquidation of Hemisphere Design Works and resumed production.
The president of KL Cos., Robert Farber, was president of GSC Technologies Inc. Under new management, the kayak manufacturer seems to have its head above water. Two of the three Muskegon production facilities are back in operations — the third is under a lease — and there's cause for optimism, KL Cos. spokesman David Long told the Muskegon City Commission on Oct. 13.
"The kayak business is booming. People want to be outside," Long said during a brief public hearing to transfer a tax abatement, which was granted.
The company has 84 employees and plans to grow, Long said.
"We've locked in some of our larger customers again. Back on board are Walmart, Dick's Sporting Goods and quite a few. It's looking to be a good 2021 season," Long said.
KL Outdoor has been busy since reopening. The previous owners had liquidated all finished goods, but demand for kayaks is up because of the pandemic.
"We started out on June 1 brand new. We've made 64,000 kayaks so far, and we still have 32,000 on order for the remainder of the year," Long said.
Elected officials are pleased with what's happening. One city commissioner thanked KL Cos. for "resurrecting" the business and providing jobs.
"We do appreciate you taking the risk and getting into this venture," Mayor Stephen Gawron told Long, "and getting the lights back on there and seeing wonderful product move back out throughout the country."