French snowsports giant Rossignol to buy Felt Bicycles as cycling trend grows
today Feb 3, 2017
Further evidence of the impportance of cycling came Friday as French snowsports equipment firm Rossignol said it has agreed to buy Felt Bicycles, a US maker of racing and mountain bikes, clothing and accessories, with annual sales of more than $60m.
"If we can double that [sales figure] within five years, it would not be bad," Rossignol CEO Bruno Cercley told Reuters. "Cycling is a very natural extension of Rossignol's business as well as complementary in seasonality," he added.
Rossignol has expanded into fashion and more recently cycling in order to reduce its dependency on snowsports, buying French bike maker Time Sport International in 2015, a business that generates €10m ($10.8m) in sales.
Overall, Cercley said he hoped Rossignol can triple revenue from cycling activities within four to five years.
The privately-held Felt Bicycles company is known for its cutting-edge mountain and racing bikes with which athletes have won World Championships and Olympic gold medals.
CYCLING TREND GROWS
The move to buy Felt is part of a general trend that has seen cycling grow as a category not only for equipment makers but for the fashion sector. From cycling cafes to on-trend cycling stores, cycling is a lucrative category that only recently has seen LVMH's private equity arm buying Pinarello and political developments helping to boost cycling's appeal to city workers.
Only this week Casio G-Shock announced its first-ever collaboration with bike shop-turned-international street style and cycling brand Chari & Co on a limited edition men's GA500 watch. The $190 limited edition watch launches this month and is inspired by the three main components of a bicycle.
ROSSIGNOL TAGETS GROWTH SECTORS
While demand for ski equipment has ebbed in the past decade, as more people hire rather than buy skis, the global bicycle market, worth some €30bn to €40bn, is growing at between 2% and 4% per year, according to Cercley. Add on sales of clothing and accessories linked to this and the market potential is huge.
Currently Rossignol still makes the bulk of its €243m of annual sales from ski equipment, with clothing accounting for just 10%. It makes 75% of its sales outside France, including 31% in north America.
It competes with Fischer, Head and Amer Sports' Atomic and Salomon brands and accounts for 24% of the world ski equipment market. Its brands also include ski maker Dynastar, Lange boots and Look bindings.
Rossignol had suffered for years from weak demand but returned to profit in 2010 after cutting jobs, scaling back its production facilities and paring down its product lines.
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