Having stumbled on its first trip down the ski slope, Quiksilver may be ready to quit the sport it took up just two years ago. And that could give the company's share price a nice run.
Known for its skate and surf wear, the Huntington Beach, Calif., company last month posted its first quarterly loss since 1992. The main reason: a foray into the ski business via the company's 2005 acquisition of Rossignol. The European brand, once seen as a growth opportunity, now seems to be dragging the company under the waves.
Rossignol, a mature company known for snowboards, skis and other so-called hard goods, was always viewed as an odd choice for Quiksilver, whose growth has thrived on apparel and lifestyle sportswear. What hope there was for the $305 million deal hinged on the combined company's bid to gain traction in the $47 billion-a-year outdoor market.
Quiksilver is considering whether to backtrack completely by selling Rossignol. Any sale would undoubtedly be at a loss to what the company paid, but observers say it would nonetheless boost interest in the stock by removing a cloud hanging over the company, which has a market value of about $1.7 billion.
Quiksilver itself has hinted that it may be looking for a pathway off the slopes. During a conference call last month, Quiksilver Chief Executive Robert McKnight Jr. indicated that he is now considering "all the strategic possibilities" for its flagging brand.
"We're looking at every possible alternative concerning the hard goods," he said. "Everything is on the table."
Does means that DC, Lib and Gnu are on the table to the highest bidder along with Rossi?
This information is provided to you by The Public Advisor so that riders like you can make informed decisions about equipment choices and support companies that actually believe in the sport you know and love!
Quiksilver is obviously not one of them... and that includes DC, Lib Tech, Gnu, Roxy, Dynastar, Rossignol, Hot and Hammer. Research your board buying decision and make a decision based on where the money goes and not on the "in-group / out-group" coolness factor!
Out
PS: Send Quiksilver an email letting them know that you as a rider don't appreciate them bastardizing your favorite brands in the name of someone's silly retirement fund:
