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Saw at TGR...K2 Buys Marker, Volkl & Marmot

post #1 of 25
Thread Starter 
post #2 of 25

Very interesting

Thanks for the heads up, Irul.
post #3 of 25

Manufacturer volumes

Got into a discussion with my two local ski shop owners about this over the weekend, and the question arose regarding the relative production volumes of the major manufacturers. Both had quite different ideas about who was the largest and how big K2's volumes were. Anyone have the correct information?

BTW I was staggered at how small the sales volume of Vokl/Marker was. No wonder there is alot of M&A activity.
post #4 of 25
What do you think? K2 ski prices up and Volkl down?
post #5 of 25
Quote:
Originally Posted by Bryan
What do you think? K2 ski prices up and Volkl down?
No. Part of the strategy (at least as they describe it) is that the K2 and Volkl brands are in different parts of the market. If anything, you might see the opposite. Or maybe the more high-priced future models, though based on K2's current designs, might wind up branded Volkl.

K2 = new school / good value / made in China ... think Toyota
Volkl = traditional & racing / prestige / made in Europe ... think BMW

Perhaps a more parallel example (though different) would be Ford & Mazda vs. Volvo & Jaguar.
post #6 of 25
I shutter to think of K2 designs with a Volkl brand name. Being an engineer by trade, to think that the American way of design would be applied, or forced on, an European approach makes me cringe. There goes the style of Volkl.

I might as well switch to the Swiss Ski.
post #7 of 25
Quote:
Originally Posted by gerathlete 1
Got into a discussion with my two local ski shop owners about this over the weekend, and the question arose regarding the relative production volumes of the major manufacturers. Both had quite different ideas about who was the largest and how big K2's volumes were. Anyone have the correct information?

BTW I was staggered at how small the sales volume of Vokl/Marker was. No wonder there is alot of M&A activity.
In the US, there is no doubt that K2 and Volkl are currently the top players. K2 is the #1 brand in terms of pairs sold while Volkl is the #1 brand in terms of dollars sold. For this past season, K2 sold over 100,000 pairs domestically while Volkl sold almost 90,000. Volkl sold those pairs at an average wholesale price of close to $400.

Globally, it's a little different story. Fischer is believed to be the world leader in pairs produced. Rumors are close to a million pairs, but I can't substantiate this. Volkl does quite well in Europe - they are #1 or #2 in Germany, Switzerland and Italy. K2 does not do particularly well in the old world. I don't know if can be blamed on anti-American sentiment or not. More likely, this can be blamed on K2's lack of interest in racing. It seems the Euro consumer is still much more influenced by racing than freeriding.
K2 does do well in Canada, Australia and NZ.

In terms of total production, it's estimated that Volkl manufactures about 450,000 pairs a year. I believe that K2 produces a relatively similar number.

The acquisition makes sense because K2 and Volkl are different products with different strengths and different target customers. It is believed that K2 will rely heavily on the European Volkl management team to jump start K2 sales on the continent.

Since both brands are doing very well in the US right now, I tend to doubt that you see will much, if any, change in the way they do business domestically. I don't think you'll see cheaper Volkls or more expensive K2s because that would cause the brands to compete head-to-head. I would guess that you might see the Volkl race staff help K2 get a race program started. They may decide it's crucial for the European market.

BTW, what Volkl sales number 'staggered' you, US or global?
post #8 of 25
Quote:
Originally Posted by troutman
In the US, there is no doubt that K2 and Volkl are currently the top players. K2 is the #1 brand in terms of pairs sold while Volkl is the #1 brand in terms of dollars sold. For this past season, K2 sold over 100,000 pairs domestically while Volkl sold almost 90,000. Volkl sold those pairs at an average wholesale price of close to $400.

Globally, it's a little different story. Fischer is believed to be the world leader in pairs produced. Rumors are close to a million pairs, but I can't substantiate this. Volkl does quite well in Europe - they are #1 or #2 in Germany, Switzerland and Italy. K2 does not do particularly well in the old world. I don't know if can be blamed on anti-American sentiment or not. More likely, this can be blamed on K2's lack of interest in racing. It seems the Euro consumer is still much more influenced by racing than freeriding.
K2 does do well in Canada, Australia and NZ.

In terms of total production, it's estimated that Volkl manufactures about 450,000 pairs a year. I believe that K2 produces a relatively similar number.

The acquisition makes sense because K2 and Volkl are different products with different strengths and different target customers. It is believed that K2 will rely heavily on the European Volkl management team to jump start K2 sales on the continent.

Since both brands are doing very well in the US right now, I tend to doubt that you see will much, if any, change in the way they do business domestically. I don't think you'll see cheaper Volkls or more expensive K2s because that would cause the brands to compete head-to-head. I would guess that you might see the Volkl race staff help K2 get a race program started. They may decide it's crucial for the European market.

BTW, what Volkl sales number 'staggered' you, US or global?
The global sales of about $170m. I was surprised at how small it was. BTW the local view here is that Rossi is the number 1 producer with around 1.25m pairs. Yet to confirm how true this is.
post #9 of 25
Quote:
Originally Posted by gerathlete 1
The global sales of about $170m. I was surprised at how small it was. BTW the local view here is that Rossi is the number 1 producer with around 1.25m pairs. Yet to confirm how true this is.
Yes, in the big picture, $170M is not a lot. The ski business isn't as large as most people think it is. In the US, it's estimated that only 2-2.5 million different people buy a lift ticket every year. And that number has not increased for years, even as our population has grown. I would be interested to know if this trend is the same in other skiing nations.

The entire US sales of ski equipment was about $670M last year. That includes skis,snowboards, boots, bindings, poles, helmets, and goggles.

I can't confirm or deny the Rossi figure. If they do sell that many, I would be curious where they are doing it. They must really dominate their home country. For clarity, the 1M pair number I cited for Fischer includes OEM business for other companies. They have produced lower-end skis for just about everybody else, including Salomon and Volkl.
post #10 of 25
I'm curious to know how Tecnica/Nordica will react to the acquisitions, after all the ties with Voelkl were pretty tight.
post #11 of 25
Quote:
Originally Posted by Nobody
I'm curious to know how Tecnica/Nordica will react to the acquisitions, after all the ties with Voelkl were pretty tight.
Interesting point, but I don't think the acquisistion could have gone through without a blessing from the Tecnica Group - they were a financial player in the deal.

I've seen a european press release effectively stating that the Tecnica/Voelkl/Marker marketing strategy will remain in place for the time being.
post #12 of 25
Troutman...you rock!
post #13 of 25
A friend of mine owns a ski shop. He was in the process of phasing out K2 skis for numerous reasons. One big reason was K2 sold skis through big chains making it hard to compete especially with their constant renaming of models. Another big reason was K2s practice of releasing new models in mid-season leaving shops with current season inventories that are all of a sudden obsolete.

At the same time he was moving his line towards Volkl, Technica & Nordica because of Volkls emphasis on local specialized shops. I wonder how the merger will effect Volkl/Technica/Nordica marketing strategy of keeping their upper-end skis & boots in non-chain ski shops.
post #14 of 25
Quote:
Originally Posted by Rio
I wonder how the merger will effect Volkl/Technica/Nordica marketing strategy of keeping their upper-end skis & boots in non-chain ski shops.
Since both companies, K2 and Volkl, have done so well recently with each of their respective strategies, it would seem intelligent to keep each brand on it's current path. If Volkl were to be pushed to mass market, their primary competitor would be K2. Doesn't make sense.

Of course, I acknowledge that public companies don't always do things that make sense.
post #15 of 25
Kidding on the square...14 months from now a management group from Volkl will try a buyback....
post #16 of 25
Rossi's fiscal year ended April 30 and they haven't posted their annual report yet, but from the 02-03 annual report they report for combined ROSSIGNOL – DYNASTAR 38.7% market share and 1.21 million pair sold. They claim to be #1 in market share. Total market of 4.2 million pair of skis.

You can get the annual report at http://www.rossignolcorporate.com/index.php?&class=Rapport&function=browse&template= matrice.html&context[file]=finan_rapport.html&type=1&oidPage=162
From the annual report:
<B>
IN NORTH AMERICA
</B>
In this geographical zone, which represents 23% of the world market, the 2002/2003 season proved to be one of contrasts: the East coast had plenty of snow whereas snowfall on the West coast was less satisfactory.
In the United States:
in 2002/2003, the market recorded a fall of nearly

2% by volume. The Group’s brands, which occupy the number 1 position, held 32.4% of the market in terms of numbers of pairs. By value, their market share remained unchanged.
In Canada:
there was an upturn in the Canadian market, resulting in an increase of more than 8.5% by both volume and value. At the end of the 2002/2003 season, the Group’s brands held more than 39% of the market by value.

post #17 of 25
Quote:
Originally Posted by WVSkier
from the 02-03 annual report they report for combined ROSSIGNOL DYNASTAR 38.7% market share and 1.21 million pair sold. They claim to be #1 in market share.

From the annual report:
NORTH AMERICA
In this geographical zone, which represents 23% of the world market, the 2002/2003 season proved to be one of contrasts: the East coast had plenty of snow whereas snowfall on the West coast was less satisfactory.
In the United States: in 2002/2003, the market recorded a fall of nearly
2% by volume. The Group's brands, which occupy the number 1 position, held 32.4% of the market in terms of numbers of pairs. By value, their market share remained unchanged.
The Rossignol and Dynastar brands combined probably were the worldwide #1 in 02/03. Rossignol's greatest strength is that it's a solid brand in most, if not all, countries. Most other brands, notably Volkl, K2, Salomon, and Atomic, have nations where they are very strong and nations where they are quite weak.

For the US market in 03/04, however, the scenario is quite different. Through the end of March 04, K2 had sold the most pairs and Volkl the most dollars.

Additionally, when K2 and Volkl's 03/04 numbers are combined, they would account for approximately 150,000 pairs (US) of skis. Rossignol and Dynastar totalled about 100K pairs combined (US.)
post #18 of 25
Quote:
Originally Posted by Bryan
I shutter to think of K2 designs with a Volkl brand name. Being an engineer by trade, to think that the American way of design would be applied, or forced on, an European approach makes me cringe. There goes the style of Volkl.

I might as well switch to the Swiss Ski.
Funny you should say that. I'm doing just that this year (although last season I dabbled in Dynastar). I'm the new Stockli rep for my home mountain.
post #19 of 25
Originally Posted by Bryan

"I shutter to think of K2 designs with a Volkl brand name. Being an engineer by trade, to think that the American way of design would be applied, or forced on, an European approach makes me cringe. There goes the style of Volkl.

I might as well switch to the Swiss Ski."


The design team for Volkl remains the same and will do so. K2 recognizes the strength of Volkl and bought them as an investment, not to change them in the immediate future. I'll keep skiing on my German designed and made Volkls, thank you very much
post #20 of 25
Quote:
Originally Posted by troutman
I would guess that you might see the Volkl race staff help K2 get a race program started. They may decide it's crucial for the European market.
Yeah, maybe Volkl will help K2 set up a race room on Vashon Island or something...

It's my bet Volkl will just continue to be...Volkl...
post #21 of 25

K2 Volkl Info

Ok here is the story as i understand it:

A guy by the name of Sonata (Spelling?) owned Volkl, Technica, Marker, Dolomite and Nordica, he has sold Volkl and Marker to K2 in return for K2 shares, he still owns Technica Dolomite and Nordica, but don’t be surprised if K2 ski boots suddenly appear on the scene, stranger things have happened.

I wouldn’t imagine ski pricess will change at all, the only likely change as a result of this alliance is more profit for K2, I would assume that they have set prices at the market dictated level rather than on a cost plus basis in which case you wouldn’t f*ck with the prices, just cream more off the top.

Also I would imagine manufacture will mostly be kept seperate, but you may see some similarities in lower end skis, just with diferent branding, I cant imagine them wanting to dilute either brands image at the performance end. Also, expect recreational K2s to be fitted with the integrated marker rail binding as well, as this is unfortunately the way ski design seems to be going.

The reason that K2 havent been doing well in Europe is nothing to do with anti American feeling but more to do with poor distribution, the distributor in the UK has not really had a skier in charge for a while and last year they didnt even sell the skis, only boards, I had to import from Germany myself, they seem to have sorted themselves out for this year with good staff and a plan, but with only 2 shops in the UK selling them last season, its hard to imagine them getting anywhere near the big guns.

The new freetyle ski movement is slowly happening in the UK, but people like Salomon and Rossignol still think racing sells skis, and maybe it does if you ever win something, but this is not an issue in the uk. New school is coming through and Line and Armada will clean up, leaving the big guys crying in their soup!

Hope this is of some interest to some of you.

cheers
Neil
post #22 of 25
Zanatta, Zanatta.
post #23 of 25
Quote:
The new freetyle ski movement is slowly happening in the UK, but people like Salomon and Rossignol still think racing sells skis....
On this side of the Atlantic Salomon beat all the other ski manufacturers to the New School market. Their 1080s and Pocket Rockets still dominate the terrain parks.
post #24 of 25
Quote:
Originally Posted by Bryan
I shutter to think of K2 designs with a Volkl brand name. Being an engineer by trade, to think that the American way of design would be applied, or forced on, an European approach makes me cringe. There goes the style of Volkl.

I might as well switch to the Swiss Ski.
As one who has enjoyed a few seasons on K2 skis and has found their "appealing to every person" flavor quite different from the reserved precision of every comparable Volkl ski, I am inclined to agree.

However, as one who also enjoys watching the American car & truck makers try to keep up with their Japanese competitors, using various means including partnerships with or acquisitions of Japanese companies, I can also imagine that the conglomeration could well bring Volkl prices down while bringing K2 design into a more functional, Germanic economy of architecture. Ford has done well via its partnership with Mazda, and as a result, I think Ford now makes the only American cars that compete favorably with the Japanese and even some of the Germans.

So I'd reserve judgment out of prudence!
:
post #25 of 25
So, gonz, what's your take on the Bell Sports/Riddell merger?

Other than dealing with the silly logo insert on the back.
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