France's Rossignol to expand in ski wear with new owners
today Jul 16, 2013
PARIS, France - Private equity fund Altor plans to buy ski maker Rossignol and use its experience turning round Norwegian clothing brand Helly Hansen to help the French company push into ski wear, Rossignol's chief executive said.
Rossignol, one of the world's biggest and oldest ski brands, suffered for years from weak demand but returned to profit three years ago after cutting jobs, scaling back its production facilities and paring down its product lines.
Expanding in outdoor sports clothing would help reduce its dependence on the winter season and tap a market growing rapidly as people increasingly escape the city to spend more time in the woods and mountains.
"We think the Rossignol brand has huge potential in apparel and we would like to develop ranges that people can wear both in ski resorts and cities," Rossignol group Chief Executive Bruno Cercley told Reuters.
Helly Hansen was lossmaking when Altor acquired it from Bahrain's Investcorp in 2006. After a successful turnaround, Altor sold a 75 percent stake in the Norwegian company last year to a Canadian pension fund for about $350 million.
Altor plans to buy 80 percent of Rossignol from Australian bank Macquarie and U.S. consumer products group Jarden , which own 77 percent and 17 percent of the company respectively.
Terms were not disclosed but a person close to the deal said it valued Rossignol, which has no debt, at around 150 million euros ($195.80 million). Macquarie and Jarden bought Rossignol from Quick Silver for 40 million euros in 2009.
A group of private investors have offered to buy the remaining 20 percent, including Cercley, who already has a small stake in Rossignol, and the Boix-Vives family, who owned Rossignol for decades until they sold up to Quick Silver in 2005 for 360 million euros.
Founded by carpenter Abel Rossignol in 1907, Rossignol has been equipping racers since the first winter Olympic Games in Chamonix, France, in 1924 and today sponsors World Cup winners Tessa Worley of France and Lara Gut of Switzerland.
Backed by Norway's Altor, Cercley said Rossignol had a better chance of elbowing its way into an outdoor clothing market crowded by brands such as The North Face, Patagonia, Columbia and, at the high-end, IPO-candidate Moncler.
Operating margins in outdoor apparel tend to reach around 15 percent while in the skiing equipment market they hover around 5-10 percent for the strongest brands.
Rossignol's brands also include ski maker Dynastar, Lange boots and Look bindings. The company competes with Austria's family controlled Fischer, Vienna-listed Head and Amer Sports' Atomic and Salomon brands.
Demand for ski equipment has ebbed in the past decade due to the near-disappearance of the Japanese market and the growth of rentals, driven by skiers who increasingly hit the slopes on short trips and do not want to carry their gear.
The global ski market has been on the decline since reaching a peak in 1980 thanks to the mushrooming of ski resorts. Ski sales have dwindled to 3.2 million pairs this year from 3.5 million in 2009 and more than 7 million in the early 1990s.
Cercley said he expected the Sochi Winter Olympic Games next year to help boost sales as orders were already 12 percent ahead of last year and he foresaw revenue growth of 10-15 percent.
In the year to March 31, Rossignol group made a net profit of 3 million euros on turnover of 208 million, against a net profit of 5 million on sales of 207 million the previous year.
Closing of the sale to Altor is expected in the autumn. Cercley said the company would then go on the hunt for acquisitions in the outdoor segment to reduce the company's focus on winter sports.
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