MUNICH — Warming weather and a darkening economic climate underscored Quiksilver Inc.’s decision to off-load French ski apparel and equipment firm Rossignol.
This story first appeared in the January 29, 2008 issue of WWD. Subscribe Today.
“Winter 2006 was the worst winter in history. Combined with tough economic times, we were forced to find ways to reduce our debt,” Quiksilver president Bernard Mariette told WWD here Monday at the International Trade Fair for Sports Equipment and Fashion, also known as ISPO.
“We were getting a lot of pressure from the shareholders to sell Rossignol. What we thought we could do in three years would ultimately take five years to accomplish,” Mariette said of the decision to sell. “Due to the economic and environmental climate, five years is too long to wait. We need immediate results, which is why we have decided to sell the company.”
Quiksilver purchased Rossignol in 2005 for $320 million in cash and stock.
Mariette declined to comment on the value of Rossignol, but noted that potential suitors have already been in touch. He estimated a deal would be struck in the next six to nine months.
Over the past two years, Rossignol reduced its annual ski production from 1.6 million skis to 1 million in 2007. It also trimmed its factory and warehouse operation to focus on building the brand’s apparel business, which had been the next step in Quiksilver’s plan to transform Rossignol into an outdoor sports lifestyle company.
Rossignol’s fall 2008 selection of ski and outdoor looks for women, on show here, were already beginning to exhibit Quiksilver’s trademark edgy take on sports apparel. A heritage 1907 line, designed for on and off the slopes, was garnering attention at the show, which will wind up its four-day run Wednesday.
“We still firmly believe in Rossignol. We have a clear vision for the brand,” Mariette said.
In December, Quiksilver sold Cleveland Golf Co. Inc. for $132.5 million to Japan-based SRI Sports Ltd. A stake in Cleveland Golf was originally part of Quiksilver’s acquisition of the Rossignol Group in July 2005. Speculation had been escalating in recent months that the Huntington, Calif.-based Quiksilver would continue to reduce its exposure to the hard goods manufacturing business, which continues to be its Achilles’ heel.