PORTLAND, Ore. – Back in 1983, when Tim Leatherman first started selling his patented “Pocket Survival Tool,” he offered a 25-year warranty to back up his product.

For early owners of Leatherman’s now ubiquitous tool – an all-in-one gadget packing a screwdriver, pliers and blades – that guarantee runs out this month as the company celebrates 25 years of business. But for Leatherman, who grew his company out of a Portland garage and retired in 2005, there’s no intention of turning away any longtime customer’s warranty claim, no matter how long expired.

Over the past quarter-century, that old-fashioned approach to customer satisfaction has been one of Leatherman Tool Group’s primary marketing schemes. Now with more than 550 employees, the company has sold millions of tools despite relatively few changes to Leatherman’s original design.

Still, in recent years, Leatherman faced a harsh reality that confronts many companies nationwide: Longevity depends on that of its customers, and in Leatherman’s case, those were mostly aging, male baby boomers.

The same recreationalists – hunters and fishermen – who made Leatherman tools indispensable are now giving up those sports in record numbers.

The solution for the company, never a stranger to invention, has been reinvention. In the past three years, under Tim Leatherman’s handpicked successor Jake Nichol, the company has launched new products to reach younger, hipper adventurers targeted through a fine-tuned marketing strategy. A new, sleeker, lighter product released early this year, called the Skeletool, has surpassed sales expectations after just six months. More new products are on the way, for gardeners, bicyclists, kayakers.

“People my age know Leatherman,” says Nichol, 56, president and chief executive officer. “But my kids don’t know the brand.”

Leatherman isn’t alone in the country’s $1 billion sporting knife industry in trying to reach a broader customer base, says David Kowalski, communications coordinator for the industry group, the American Knife and Tool Institute.

Since 2001, knife and tool manufacturers have taken big hits due to tightened airport security measures and changing perceptions on public safety, Kowalski said.

“Way back then, it was never thought that if you carried a knife to school, you would spear somebody,” Kowalski said. ” … Also, there is so much hassle at the airports now that people don’t carry them anymore. Those things have worked against the industry.”

At the same time, Americans’ outdoor hobbies are changing dramatically.

Hunters and fishermen, who spend about $770 million annually, make up the biggest portion of the nation’s sporting knife sales. They are shrinking in number, according to the National Sporting Goods Association, which releases data on recreational trends.

Freshwater fishing as a hobby declined by almost 15 percent between 2002 and 2007, when it attracted about 30.8 million participants. Saltwater fishing lost about 2 million participants during that same time.

Over the past five years, hunting with firearms has remained relatively flat at about 19.5 million. But the sport is largely dominated by middle-aged males.

“A lot of activities have gone on the decline because more kids are doing other things that are not sports- or fitness-related,” said Larry Weindruch, spokesman for the National Sporting Goods Association. “In some cases, it’s skateboarding or electronics.”

Those trends have meant that many sporting goods manufacturers are being forced to rethink who their customers are, Weindruch said.

“Smart marketers are always looking for new markets,” Weindruch said.

After a four-year industry-wide slump following 9/11, Leatherman Tools has made dramatic changes under Nichol, a veteran of 30-plus years in the tool industry picked by Leatherman to steer the company after his retirement.

Nichol, who headed Danaher Tool Group, implemented lean manufacturing, a buzzword for increasing productivity by making products to order. The self-described sales-and-marketing guy has tripled the company’s product line in three years, from 11 types of tools to 39, adding pruners for gardeners and a plethora of knives.

For Nichol, making products that might appeal to women, young people and other outdoor enthusiasts, such as bicyclists, kayakers or rock-climbers, is key to the company’s future success. And to do that, he put in place a new product development strategy using focus groups and market research.

“That 20- to 30-something-year-old market was a big target for us,” says Nichol. “The people who really got excited and drove the success of Leatherman were the 40- to 50-something crowd. We had to start looking at other features.”

There’s more in the pipeline coming later this year: not just a revamped line of knives, but a product that the company won’t talk about.

“It’s a whole new product for us,” said Juli Warner, company spokeswoman. “It’s not a multitool, knife or a pruner. But it’s been in development for a few years.”

So far, these new efforts have spelled success for the company, which doesn’t release annual monetary sales figures. In 2007, the company sold about 3.4 million units. So far this year, Nichol says, sales have increased by 24 percent. The company also hopes to bring its staffing up to 600 employees.

Tim Leatherman, who remains the company’s chairman, considers those workers his most important legacy. Leatherman, who lives in Portland, has been staunchly committed to keeping those jobs in Oregon, where almost 80 percent of the company’s manufacturing takes place.

“When I die – and I don’t expect to for another 60 years at least – I would like my legacy to be that I created jobs,” Leatherman says.