From butcher to Alpine tycoon: a buy-and-build play 60 years in the making

Disclaimer: the information contained in the article was sourced from public filings. The views are our own and do not represent investment advice.

If you are into winter sports, you are going to enjoy this article. If you are into stories of fortunes made through persistence, you are going to enjoy it even more. 

I am bringing you the incredible story of the Gurtner family and Weisse Arena Gruppe. A story of how a butcher family built Flims Laax Falera into a world class Alpine resort that competes head-on with its Swiss compatriots Zermatt and Jungfrau - without having the prestige or the scenery of either.    

Now, you may ask: why does this article appear on RollUpEurope, a blog otherwise dedicated to vertical market software and PE deal tear-downs? 

Three reasons: 

One, I am crazy about skiing. 

Two, the story of Flims, and of Reto and Walter Gurtners holds valuable lessons for anyone looking to build a durable, equity efficient HoldCo. 

Three, Weisse Arena has reportedly been in the crosshairs of the US mountain resort aggregators Alterra and Vail Resorts. 

Read on to learn:

• The story of how Weisse Arena grew from a single cable car to a conglomerate servicing 1M+ visitors

• How the Gurtners leveraged vertical integration to outcompete iconic ski destinations like Zermatt 

Part 1: Walter’s vision and grit

Walter Gurtner was a visionary. 

He started out as a butcher (the business is still alive and kicking) but always had a passion for the mountains. His big idea was to expand the existing Flims ski area (managed by Flims Bergbahnen) by connecting it to the much larger domain of Laax.  

The Flims hoteliers, who controlled Flims Bergbahnen through the council, did not understand the opportunity.    

Exasperated, in 1962 Walter established a competitor, Bergbahnen Crap Sogn Gion, that went on to build a standalone cable car in the next door Laax. Unlike Flims, a longtime playground of the European aristocracy, back in the 1960s Laax was a dirt-poor village with barely any tourism. Laax happily hosted Walter’s cable car. 

Walter kept building. Bergbahnen Flims kept saying no to a common skipass scheme. Until one day, it did not have a choice. In 1996, the Laax and Flims lift companies merged. Thus Weisse Arena Gruppe was born.    

Core insight 1: keep your eyes on the prize, and keep building.  

Sadly, Walter did not live to see that moment. He passed away in 1982. Aged only 26, his son Reto Gurtner took over as the CEO. 

Part 2: Reto’s vertically integrated model

Today, Weisse Arena describes itself as a “vertically integrated service company in the tourism and leisure industry”. Besides ski lifts, it owns restaurants, hotels, a property developer, and ski rental shops. 

Weisse Arena’s numbers aren’t eye-popping by any means. Its 2023/24 revenue of 116M Swiss francs (c.$140M) is a fraction of the US giants’ Vail Resorts or Alterra ($2 to $3B each). Faced with fickle weather, the pandemic and labour shortages, it has struggled to grow visitor numbers. 

Meanwhile both Vail and Alterra have been on a shopping spree, picking up iconic resorts like Andermatt and Crans-Montana. Both firms have allegedly courted Weisse Arena for years - so far in vain. I would speculate that it is not just the brand they are after. The Gurtners have run their conglomerate in a distinctly American manner. Customer-first. Eliminating inefficiencies. Making it easy for people to spend money.    

Reto’s early insight was that vertical integration is key to a seamless customer experience. As Reto intimated in a 2013 book, he and his father had struggled with partnerships. With so much money sloshing around, no-one was willing to cooperate. Ski rental shops refused to join the fledgling rental portal: he opened his own rental. Swiss ski makers threatened a boycott: he bought skis from the US. Snow cannon manufacturers price-gouged: he got hold of their export price lists. 

It gets better. The laax.com domain was registered in 1995. For that, Reto had to travel all the way to New York City. Subsequently he had 90 km of fibre optic cable laid on the mountain - paid for by Weisse Arena. 

The Gurtners’ playbook can be summarised as follows:

• In-source services where quality cannot be guaranteed by third parties

• Invest in the online offering to drive down costs and grow loyalty

• Diversify suppliers

With such a sprawling portfolio, you would think Weisse Arena has a massive HQ. It does not: the subsidiaries are autonomously managed. The few centralised activities revolve around the offers that can be booked on the Laax app / website, as well as sales and marketing.

Core insight 2: a vertically integrated model helps control customer outcomes. 

The Gurtner family continues to control Weisse Arena.