Quiksilver to sell Rossignol unit for 100 mln euros
today Aug 28, 2008
NEW YORK (Reuters) - Sports apparel maker Quiksilver Inc said on Wednesday it agreed to sell its Rossignol business to a group led by Rossignol's former CEO for 100 million euros ($147 million), sending its shares up as much as 15 percent.
Chartreuse & Mont Blanc, headed by former Rossignol Chief Executive Bruno Cercley, bid on the unit, which includes the Rossignol, Dynastar, Look, and Lange brands of winter sports equipment and apparel.
Quiksilver paid $560.8 million for Rossignol three years ago, but Wall Street remained skeptical the lower-margin hard goods brand would be a good fit with the apparel and footwear Quiksilver was known for.
The Huntington Beach, California, company put the unit up for sale this year after a bad ski season and weakening economy hurt sales, as merchants sold through existing inventory instead of ordering new merchandise.
The sale allows the company to "rid itself of a negative margin business" and focus on its core apparel and footwear lines like Quiksilver, Roxy and DC Shoes, Citigroup analyst Kate McShane wrote in an analyst note.
Quiksilver expects the transaction to close in fall 2008 and said it plans to use sale proceeds to pay down debt.
Chartreuse & Mont Blanc is majority owned by Macquarie Group and has a non-voting minority interest by Jarden Corp .
Shares of Quiksilver were up $1.07, or 13.8 percent, at $8.83 in afternoon trade on the New York Stock Exchange.
(1 euro = $1.47)
(Reporting by Sarah Coffey; editing by Gunna Dickson and Steve Orlofsky)
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