PARIS — Adidas-Salomon AG is shedding its hyphenated half.
In a move to focus on more profitable sectors such as apparel, footwear and the golf category, Adidas-Salomon AG said Monday it has agreed to sell the Salomon division to Finnish sports equipment firm Amer Sports Corp. for 485 million euros, or $625.6 million at current exchange.
The sale, to be completed by the end of September, includes the Salomon, Mavic, Bonfire, Arc’Teryx and Cliche businesses, which cater to sports such as snowboarding, cycling and hiking. Amer, based in Helsinki, makes Atomic skis and Wilson tennis and golf gear, among other sports equipment labels.
“Salomon has been a great member of our group for the last eight years,” said Herbert Hainer, the group’s chief executive officer, during a conference call Monday. “However, we decided that now is the time to focus even more on our core strength in the athletic footwear and apparel market as well as the growing golf category.”
Adidas acquired the Annecy, France-based ski and sporting goods firm in 1997. At the time, then-president Robert Louis-Dreyfus touted the transaction as “a major step towards the establishment of the best portfolio of sports brands in the world.”
But Salomon ran up against a sluggish market for ski equipment and apparel, and high manufacturing costs hampered profitability. Last December, Salomon said it would cut about 160 jobs in France as it shifted production to cheaper Romania and China.
Investors, who have long been calling for Adidas-Salomon to shed the troublesome unit, cheered Monday’s news, sending shares in Adidas-Salomon up 7.7 percent to close at 129.30 euros, or $166.79 at current exchange, on the Frankfurt stock exchange.
The Salomon division saw first-quarter sales decline 9 percent to 112 million euros, or $146.9 million at average exchange rates, from 122 million euros, or $160.1 million, a year ago. Adidas blamed the drop in part on lower sales of inline skates, cycling components, and a general fall in the winter sports category.
“We stepped out [of Salomon] when we believed it was too expensive,” said Adidas-Salomon chief financial officer Robin Stalker.
"I think that all anyone really wants in life is to have people understand us for who we actually are, despite everything," says Ruth Negga. The actress talks "Preachers" season 2 and more on WWD.com. #wwdeye (📷: Dan Doperalski)
"That's something that resonates with me too because I'm so locked into a number. If I go over that number it completely ruins my day so it's nice to get detached from the number on the scale." - Chelsea Handler on Kelly LeVeque's book "Body Love." #wwdeye (📷: John Salangsang)