After only a short marriage of less than 2 years it seems dive manufactures Zeagle Systems and Pinnacle Aquatics are breaking up. While it remains to be seen what will become of the respected Pinnacle brand of wet and dry suits, we did get news today that should give fans hope. As in many divorces, this separation has its fill of rumors and innuendo and has become a battle of he said/she said.
Different stories were floating around even at the time of their union. Back then, Dennis Bulin, president and founder or Zeagle Systems, talked as if they were buying the Pinnacle outright. But, George Stauffer, then President of Pinnacle Aquatics, explained that this was not the case. Pinnacle held all of the patents and design responsibility, and Zeagle held the marketing rights. Additionally, Zeagle only leased the California facility from Pinnacle. The overwhelming comments we received from those we interviewed were clear that the pre-union Pinnacle was a well respected brand with good service. But even in the beginning, Bulin told me that
he viewed Pinnacle as a company that needed much help in customer service. There were other hints of trouble early on. Bulin cited great benefits to having bi-coastal facilities, but later essentially shut down the California branch and replaced many Pinnacle team with Zeagle staff.
Customers and dealers were kept pretty much in the dark. The Zeagle website does not hint of a problem and still lists the Pinnacle gear as if nothing has changed. But Zeagle has not been forthcoming about what will happen to the brand or how customer warranty issues will be handled. Dive forum notices show that customers are rightly concerned. Zeagle’s Bulin sent out a somewhat defensive letter to dealers (that was posted on ScubaBoard in January 2011) calling the relationship a “learning experience” (full text here). The notice implies that Pinnacle did not live up to the quality standards of Zeagle and hinted that Zeagle was coming out with its own brand of exposure protection suits. The letter only acknowledges that customers will have questions but only states they will be “answered in time.” Now in mid-March we have been told by Zeagle that a press release will be sent out next week.
Sources on both sides are tight lipped but emotion and anger about the process is evident. An inside source at Zeagle expanded on Bulin’s letter and was more direct in laying the blame on Pinnacle. He claimed, “they (Zeagle) just channeled their orders through Pinnacle New Zealand … Pinnacle NZ shipped damaged and poor quality product and tried to force Zeagle to sell it.” We later learned that in reality the New Zealand office is only a processing point for orders. All Pinnacle products go straight from production facilities to the warehouse in California. However, a large dealer we spoke with said (excepting a sizing issue that was in the past), Pinnacle suits were always “excellent quality and he never had problems. ”
Other sources on the Pinnacle side also claimed that the issue was completely different from Zeagle’s view. They said that Zeagle is struggling financially and Pinnacle products sat stuck on docks because Zeagle could not afford them. Other vendors and public documents give evidence to that claim. Blame abides in both camps at this point. It is likely the real story lies in somewhere in the middle. But most importantly customers and dealers want to be informed about what is going to happen with their Pinnacle products.
Some former Pinnacle dealers who were disappointed with the union in the first place may even be hopeful about the breakup. This is because loyal Pinnacle dealers we were not automatically accepted as Zeagle dealers. They had to apply to be Zeagle dealers and then make a large opening order of Zeagle products. One we spoke with said he “refused to join Zeagle because of that kind of treatment.”
In an attempt to get accurate facts we sent this information to former Pinnacle and current Zeagle staff including Dennis Bulin. He wrote back that he could not comment “for legal reasons.”
The Return Pinnacle Aquatics
George Stauffer, who was let go from Zeagle along with others in November 2010, wrote to dealers in December that “good things were on the horizon for Pinnacle.” In an interview today, he assured us the Pinnacle Aquatics is coming back. They signed an agreement with Zeagle to separate the two companies. Pinnacle has moved back to the California office, has inventory and should be 100% functional within a week. The new dealer price list is ready to send out. Additional good news for dealers and customers is that Pinnacle will be honoring all warranties for Pinnacle products, whether they were sold prior to, during, or after the Zeagle era.
George said they will be exhibiting at all the major upcoming dive shows, including Beneath The Sea next weekend (25-27 March in NJ), and at the Northwest Dive & Travel Show next month (9-10 April – Tacoma, WA), and the Scuba Show (4-5 June Long Beach, CA) after that, and then DEMA in November (2-5 Nov Orlando).
Pinnacle staff haven’t been resting during the hiatus and are bringing several new models to market before Summer is over. These include 7mm, 5mm, and 3mm suits, two new drysuits, undergarments and accessories.
A brand new Pinnacle website is expected to be posted shortly; as soon as Zeagle turns control of the domain name back to Pinnacle.
What seems to be the most valuable take-away for anyone considering a joint venture or merger is this. Do not get caught up in the excitement and romace of the dream. Step back. Make sure the you new partners are a good financial match and that the corporate cultures with merge and enhance each other rather than clash and compete.
We will have more on this story in the coming weeks.