Iconic Tour

How the 93-year-old matriarch of Columbia Sportswear fled the Nazis and later built a $2B empire

Tom Cunneff, special to CNBC.com
‘One tough Mother’: Gert Boyle, chairman of Columbia Sportswear

As the CEO of Columbia Sportswear, Tim Boyle oversees 6,600 employees and a couple billion dollars in annual sales, but even at 67 years old, he still has to answer to his mother, the legendary Gert Boyle, a pint-sized dynamo who fled Nazi Germany in her teens and saved the company from ruin after her husband died of a heart attack in 1970.

Now 93 and chairman of the board, Gert still comes into the office every day and has become a celebrity in the ad world with her 'One tough mother' ads that show how her resilience is reflected in her products. Now she is teaming up with Hollywood heartthrob Zac Efron on a new online commercial to keep her brand attractive to millennials.

"The background of the company is really in many ways based on her toughness in the very early days when my dad died and there weren't a lot of good reasons to stay in business," says Tim, noting that her demanding personality is not an act. "It's not always easy sometimes. Her office is right by the door I use to leave [the building], so if I head out of the office on a rare golf date in the afternoon, I get a nasty look or perhaps even a little lecture."

Truth be told, there's not much to scold Tim about these days. The CEO for almost 50 years now (he dropped out of the University of Oregon his senior year to help his mom run the company after his dad died), he's guided the business with a steady hand by listening to his customers and coming up with innovative products. In 1975, Columbia was one of the first companies to introduce Gore-Tex parkas. Ten years later its Bugaboo jacket featured a zip-out lining that became very trendy and helped spark more growth, from about $18.8 million in sales in 1987 to more than $350 million a decade later. Last year was another record year for the company, with sales reaching $2.38 billion.

Now neck and neck with The North Face for market share in the outerwear category, Columbia, which is listed on NASDAQ, is one of the outdoor industry's leaders. The company's success formula is rooted in Gert's old-school philosophy: "Early to bed, early to rise, work like hell and advertise."

"I'm very happy with the progress we have made over the years and excited about the future," says Gert, who doesn't worry about creating trendy products. "At the core, a brand's relevance is founded on how its products or services perform for its customers. Styles change and activities go through cycles of popularity, but as long as we keep improving our products in ways that help people enjoy the outdoors longer, we'll remain relevant to consumers of all ages."

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And not just in the United States. More than 40 percent of Columbia's business these days comes from outside the United States, including Russia, China and Japan. "It's a growing business," says Tim, who owns 37 percent of the company. "We have places in the world that are growing nicely, and other places that are more challenged, but part of having a global company is that everything isn't simultaneously good or bad."

Columbia's brands also include SOREL footwear, prAna yoga and adventure clothes, and Mountain Hardwear apparel. "It's a very, very solid company," says Matt Powell, sports industry analyst at market research firm NPD. "They're not on the cutting edge of fashion, so they're not really as susceptible as other companies to the changing fashion winds. The risk for them is that while they have done some really good work to be much more of a 12-month brand, if we don't get a winter, their sales suffer."

Powell also approves of Boyle and his "solid" management team, which was recently reorganized to focus even more on the end consumer. Says Powell: "It's not really about marketing but about having conversations with their customer about what they want and how they perceive the end product."

Against all odds

That kind of authenticity, no doubt, stems from overcoming hard times, which go much further back than when Neal Boyle died at age 47. They go all the way back to the 1930s, when Gert's family had to flee Nazi Germany in 1937 when she was 13 and the scope of Hitler's hatred of Jews was becoming more apparent. Before they fled, Nazi officials visited their house on several occasions to interrogate her father and wrote "Jews live here" on the outside of the house. But because Jews couldn't leave the country with more than the equivalent of $20 in cash, it meant her father had to pretty much give away his shirt factory — one of the largest in Germany, which employed hundreds of people.

His brother already lived in Portland, so he resettled the family there and bought a small business, the Rosenfeld Hat Company, with borrowed money from his mother, who had resettled in San Francisco. He changed the name to the Columbia Hat Company after opening the phone book and noticing all the businesses named after the mighty river that runs through town.

Neal went to work for her father after meeting Gert at the University of Arizona and marrying her in 1948. As hats began to lose their popularity, they started to sell outerwear because of the growing popularity of outdoor activities. Unhappy with ski gloves from a vendor, they decided to make their own, and the Columbia Sportswear brand was born in 1960.

We made a lot of mistakes in those first couple of years, but we learned from them and we got some great advice from many people within the industry that pointed us in the direction we needed to go.
Gert Boyle
chairman, Columbia Sportswear 

The company's first real success was a fishing vest with a magnet for holding flies and a curtain-hook rod holder that Gert created on her sewing machine at home. It would never have come about, though, had Neal not listened to his customers, a lesson upon which the company built its success.

"There's nothing like listening to your customers, your employees and your advisers," says Tim, who finally earned his bachelor of journalism degree from the University of Oregon in 1992. "I think it's underrated. Generally, customers will tell you what they want you to do, and if you do that, they generally reward you. I'm a big fan of listening."

After Gert's father passed away in 1964, Neal became president until his death six years later, when annual sales had reached $800,000. With no succession plan in place and no business experience, Gert and Tim started running things without a clue about what to do. Revenues fell by $200,000 that first year, and they came within a pen stroke of selling the company to pay off a loan Neal had taken out three months before his death.

"We lost all the equity in the business, and the bank called our note," recalls Tim, who's now worth an estimated $1.74 billion. "The bank was correct in asking us to sell the business, because we had no idea what we were doing, but the process of trying to sell the business was like a mini-MBA course. You'd show the business to people and they'd say, 'Well, how come you don't do this, or why are you doing that?' That was a real awakening."

When they couldn't find a buyer that was acceptable, the bank said they had just made a loan to some guys starting a shoe business in Beaverton and asked one of them, Ronald Nelson, to join a pro-bono advisory board. "We were very fortunate to have one of the early employees of Nike come on board," says Tim, who was encouraged to concentrate on products unique to Columbia. "He was really telling us where to focus our time and effort and on how many things."

Key to survival

The big lesson Gert and Tim learned the hard way is the importance of a succession plan. And their experience is not unique. Only 16 percent of family firms have a documented succession plan in place, according to a PricewaterhouseCooper survey.

Why don't small-business owners do better planning? "Because they don't have time, and everyone thinks it's going to happen to the other guy," says Wayne Rivers, president of the Family Business Institute.

Today, Columbia makes thousands of products that are sold in roughly 100 countries at retailers such as Dick's Sporting Goods, Kohl's, Amazon and Belk.

"We made a lot of mistakes in those first couple of years, but we learned from them and we got some great advice from many people within the industry that pointed us in the direction we needed to go," says Gert. "We had to be willing to change in order to survive and thrive, and that's still true today."

One tough mother, indeed.