Interesting article from the FT
|For purist skiers from the Alps, the new year is starting much like the old one has ended. Watching free-spirited Bode Miller of the US triumph in race after race was humiliating enough. Now, the French sports group Skis Rossignol is considering selling out to California's Quiksilver, best known for its casual surfing garments.
As the world's largest maker of Alpine skis - and the last major one still to be family-controlled - Rossignol has long been looking for a partner to beef up its distribution. About 40 per cent of its sales come from North America. There is scope for some synergies with Quiksilver or Nike, although traditionalist skiers might sneer at the ignominy of their gear being distributed alongside wetsuits and tennis shoes. But despite Quiksilver's snowboard business, US ski maker K2 looks like a more natural partner for Rossignol.
With Rossignol already trading at 27 times earnings, a deal would be hard to justify for any of its potential suitors. Rossignol has tended to blame one-off factors for low profitability, but these have had a tendency to recur year after year. The truth is that traditional ski-makers have been on a downhill slope for much of the past two decades. They suffered badly from a string of warm winters in the late 1980s in the Alps - and most never really recovered, partly because of the macro-economic slump in Japan, once their brightest hope.
Over the last few years, industry-wide ski sales have stabilised at about 4.3m pairs, as snowboarding has lost some of its allure. But that is still only just over half the level of the mid 1980s and many of the more exciting new products have come from smaller ski-makers and innovative start-ups.