K2, Volkl, Dalbello, Marker, Marmot, Full Tilt and Line..What Does the Future Hold for Them?

[Philpug]

It is sad when you businesses become a "destraction".

By Charlie Lunan

Newell Brands Inc. (NYSE:NWL) will begin winding down businesses in the coming weeks it does not think it can sell, with the goal of closing them by the end of the year, its CEO told investors Thursday.

“We have made the choice to move quickly, more quickly than we originally envisioned, such that we drive the organizational change in the U.S. all the way to the end game by the end of the year,” CEO Michael Polk said in a presentation at the Barclay’s Global Consumer Staples Conference.

The end game refers to Newell Brand’s plan to divest unidentified businesses that generate $250 million to $300 million in annual revenue. Newell Brands has not said what businesses it plans to exit, but some speculate it will divest winter sports brands picked up April 15, when it closed its acquisition and merger with Jarden Corp.

“Ideally I would like to sell these assets versus simply walking away from them,” Polk told his audience Thursday. “Some of them are the kinds of businesses that would be difficult to sell and therefore, we should just shut down because they create no value for you and they are a distraction for us.”

Read the whole story HERE.

This could have a major effect in the ski industry. I know some from K2 that jumped and I know some that were pushed but this could be devastating. K2, Marker and Volkl IMHO still be around in some form...Line, Full Tilt and Dalbello have greater storms to weather. A lot will happen by the end of the year as this plays out. We are not talking a cash rich industry where an Amer or another group can come in but it sounds like any of these companies can be had for pennies on the dollar.

 

[Erik Timmerman]

Wind down? Holy Shit.

 

[Erik Timmerman]

I heard that Newel wants to keep Volkl and get rid of everything else.

[insert devil emoticon] Maybe Vail could step in and buy these companies?

 

[Choucas]

If you look at the K2 website, they are advertising job openings for everything under the sun. Never a good sign.

 

[AmyPJ]

The K2 brand alone seems it would be worth a LOT.

 

[DoryBreaux]

Hopefully what happened with Marzocchi last year will happen here; they'll get bought up last minute. It would be a damn shame if any of them disappeared.

 

[DoryBreaux]

[insert devil emoticon] Maybe Vail could step in and buy these companies?

LOL that's funny :-D

 

[Philpug]

I am sure that we will see K2, Volkl (with Dalbello) & Marker survive. But Line, FT and Marmot? What do they bring to the table that you can't get anywhere else?

 

[markojp]

Someone will buy the FT molds and tooling, move it to Detoit, and rebrand it as DTW... Maybe Shinola boots?

 

[markojp]

Won't happen, but it'd be cool if K2 moved production back to the US... Why not Detroit? Transportation hub, skilled labor, low costs, great state tax incentives... yeah, I'm a sci-fi fan.

 

[Philpug]

I am guessing that all of the winter products were a throw-in when Newell bought Jarden. Someone will buy the brands, Marker is 30-40% of the market if you consider all of the system bindings. I could see Tecnica Group buying Marker.

 

[markojp]

Yeah, I'd guess Line and Marmot are done.

 

[markojp]

I am guessing that all of the winter products were a throw-in when Newell bought Jarden. Someone will buy the brands, Marker is 30-40% of the market if you consider all of the system bindings. I could see Tecnica Group buying Marker.

That makes sense.

 

[DoryBreaux]

I could see Tecnica Group buying Marker.

That would not be surprising at all really. Aren't all of their system skis using Marker? I feel like you typically see Marker demo bindings on Blizzard skis...

 

[markojp]

In all the Blizzard and Nordica product... Some Nordica system skis use different, but it wouldnt be a hard fix

 

[Philpug]

In all the Blizzard and Nordica product... Some Nordica system skis use different, but it wouldnt be a hard fix

Not at all. No need for any Vist sourced products. Here is a question then..does Tecnica also bring Volkl aboard since there is some history? There is some redundancy but, that has never stopped anyone in this industry. What other big player does not have a binding? Amer (Salomon/Atomic) does not need one. Rossignol/Dynastar have Look. Head has Tyrolia. Lets look at brands that are big enough that they actually have their own manufacturering facilities and have co-branded bindings.. Elan and Fischer. Then you have smaller ones like Kastle and Stockli, do they have the money for a powerplay? Who will control 1/3 of the worlds binding market?

 

[markojp]

Nope.

 

[Mike Thomas]

Who will control 1/3 of the worlds binding market?

Well, my 'vision' was a bigger company like Marker buying Kneebinding... but maybe Kneebinding could shock the ski world and be the frog that ate the snake.

(Not holding my breath on that one).

Honestly, I can't understand why anyone would want to own a ski binding company. All the liability and very little monetary upside... no thanks.

 

[Muleski]

I would assume that Marker is the gem in that portfolio. Would seem like Tecnica Group would want them, and they might get outbid. Who knows how rational bidders might be.

My brother in law deals with corporate wind downs, and often with selling off the assets. Amazing how much value the brand name has above the rest in some cases. Particularly with consumer goods. Wonder how Volkl will fare on this. I'm not on top of their tennis business, etc. I think the ski world could sadly exist just fine without them. Sadly because we have a lot of history with them. But some of their product in recent years has me wondering. For example, their SL race skis are made like glass. I know one U19 athlete, who's VERY good, who I think broke a dozen SL skis last season. Nothing that he was doing "wrong." I just heard a coach tell a couple of athletes that he's concerned that they will break skis and not have more available when it happens, so perhaps these kids should start out with three pairs, or ideally four....as they will break. Volkls have skied pretty well, and on the USSA race deals, they are on the cheap side. Ouch. I have a hunch that the brand name is worth something. Maybe they get packaged with Marker?

Phil and Tricia would probably have a handle on whether having Volkl missing from a shop wall would really be an issue. I have three shop owner friends, and I don't think one carries Volkl these days. Back before the rise of Head and Blizzard, yes. There seem to be so many good skis out there.

Dalbello is making some great boots. Guess we'll see there.

K2 might be the sleeper, in terms of value, IMO. They have been building some nice skis. I have no clue on how well they distribute, world wide, on on how they are doing. Product seems better that ever. I bet they survive. The brand name is there. Recognizable.

This business is SO "important" to people like us. Press releases like this make it seem pretty small and inconsequential in the big picture. Bothers me, but maybe t's just harsh reality. Like this winter sports stuff is an aggravation, not worth the energy. No upside. No margins. Hate to read that.

Great sport. Brutal business.

 

[Erik Timmerman]

My understanding of it is that Volkl is the one company of the bunch doing well enough financially that Newell would not mind keeping it.