Facing a slumping winter sports equipment market, Rossignol, the French ski and snowboard manufacturer, has implemented a strategy to drastically reduce operating costs in an effort to reach a positive operating profit within two years.

This story first appeared in the March 30, 2009 issue of WWD. Subscribe Today.

On Friday, senior management outlined a “revival” plan, which includes a workforce reduction of 30 percent for the group worldwide, or 500 posts, including 275 jobs in France. The company employs 1,500 people.

Rossignol, like other manufacturers in its sector, is dealing with continued growth in the ski rental activity, a fall in demand in the skiing industry of almost 40 percent in the last 20 years, increased pressure from competitors, and the economic crisis. Last November, Quiksilver sold Rossignol for $50.9 million to Chartreuse & Montblanc, and at the time, Rossignol was already showing heavy losses.

Among the steps it is taking are simplifying its sales offering; consolidating industrial sites by focusing on strong points; strengthening the identity for all brands, and significantly cutting back on all operating costs.

“The plan is unavoidable….These are difficult decisions. The fundamentals of Rossignol are sound, but the current situation is not tenable,” said Bruno Cercley, president of Rossignol.

The company noted that while Rossignol’s level of debt reached one and a half times its annual revenue in October 2008, the terms of the buyout virtually cleared the debt, making the group’s recovery possible if conducted without delay.

In addition, the company said a new head office is under construction in Moirans, near Grenoble, which starting in July, will house all the central functions such as human resources, marketing, R&D, finance, legal and sales administration.