Simms Bought for $192 Million

[Josh]

It's just purely optics and politics at work.

No, I got that. My point was that they did a half-assed job. If you are going to have "sporting" and "outdoors" divisions for the optics/politics, then at least do it right. Putting a powder company in your "sporting" group but leaving a reloading company in the "outdoor" group is dumb.

 

[SUSteelie]

@Yard Sale Simms sales is $110 Million, and the Company has grown on average 15% the last couple of years. When Castanea (private equity firm) bought the Company, their thesis was that growth was capped out in fly-fishing (it's not really a growing industry, ultimately industry size is pretty small, and Simms was already a very large amount of market share in the apparel segment which didn't leave room for growth through taking market share), and that the most viable opportunity for growth was take what they'd done in fly-fishing and try to recreate it for the broader "gear" fishing world. I think they've seen a lot of growth in the world of bibs and jackets sold to boat fishermen

Private equity owners usually a lot more active in trying to drive growth. Now that they're owned by a large public holding Company, I'd guess there won't be any new big transformative strategies. Probably just continues on as status quo.

 

[RCF]

Found this article about Vista Outdoors. A little bit old but describes the founding, trials and tribulations and the management approach/style of the current CEO. The management approach/style continues by having Centers of Excellence and leaving existing management in-place on buyouts....

You may not know Anoka company Vista Outdoor, but you know its brands

It has been almost five years since the company made up of sporting brands spun off from Alliant Technology Systems.

www.startribune.com

 

[krusty]

While relatively rare I've seen some acquisitions that transformed the original firm in a positive manner. Garmin acquired DeLorme satellite communications, and greatly improved product and service.

It helps, of course, when it's a natural fit. I don't think Orvis purchasing Scientific Anglers was a mistake...3M was only interested in the brand during the era when its CEO was a FF fanatic.

GE is the world leader in weird acquisitions that are purchased at high cost and sold at tremendous loss. They come in, scrap successful leadership, and impose the GE management style.

The classic worst case was when AMF acquired Harley Davidson.

Engineering and construction firm acquisitions are uniformly disastrous.

So many of these disasters are associated with corporate America's belief in 'plug and play' CEO musical chairs. The failing CEO is jettisoned with a huge severance package and is immediately snapped up and given opportunities to destroy yet another firm.

 

[MT406]

What troubles me is Simms acquired the River Edge fly shop. Now a publicly traded company owns it and will be actively involved in the outfitting business..

 

[Yard Sale]

@Yard Sale Simms sales is $110 Million, and the Company has grown on average 15% the last couple of years. When Castanea (private equity firm) bought the Company, their thesis was that growth was capped out in fly-fishing (it's not really a growing industry, ultimately industry size is pretty small, and Simms was already a very large amount of market share in the apparel segment which didn't leave room for growth through taking market share), and that the most viable opportunity for growth was take what they'd done in fly-fishing and try to recreate it for the broader "gear" fishing world. I think they've seen a lot of growth in the world of bibs and jackets sold to boat fishermen

Private equity owners usually a lot more active in trying to drive growth. Now that they're owned by a large public holding Company, I'd guess there won't be any new big transformative strategies. Probably just continues on as status quo.

Wow, thats bigger than I thought. My fear/experience is that when a big company buys a smaller one, and especially if they can't grow their market share, then they just try and increase their margins. They make the good stuff more expensive and then offer a bunch of cheaper low quality shit. Or worse yet they combine the 2 and make the good stuff in a cheaper way with less quality. Time will tell....

 

[krusty]

Wow, thats bigger than I thought. My fear/experience is that when a big company buys a smaller one, and especially if they can't grow their market share, then they just try and increase their margins. They make the good stuff more expensive and then offer a bunch of cheaper low quality shit. Or worse yet they combine the 2 and make the good stuff in a cheaper way with less quality. Time will tell....

And slowly cannibalize all the customer goodwill that took so many years to develop.

 

[Lake flyer]

Usually the upper management that was focused on the product and customer service is eventually replaced with management focusing on “Brand” marketing, and cost cutting. I think customer service will probably outsourced and talking to anyone or in the repair shop or Bozeman office will be a thing of the past. Wouldn’t be surprised to find they start an automated customer service help line that never gets you anywhere.

 

[Derek Young]

 

[krusty]

View attachment 24953View attachment 24953

Never seen an acquisition that wasn't accompanied by feel-good word salad. Talk is cheap.

 

[_WW_]

So many of these disasters are associated with corporate America's belief in 'plug and play' CEO musical chairs. The failing CEO is jettisoned with a huge severance package and is immediately snapped up and given opportunities to destroy yet another firm.

Where do I throw my hat in the ring for that?

 

[Shad]

Good for the Simms folks... this is a heck of a reward for their work building a good brand over the years.

For those of us who like quality stuff... not so great. Hopefully, another brand will fill the void Simms leaves when the changes take hold. Sadly, if one does, their prices will likely be even higher than Simms', with the simple argument that it's "just what quality costs these days."

 

[krusty]

Where do I throw my hat in the ring for that?

First we'll need to do some testing to determine if you're enough of a functional sociopath to fill such a position.

 

[Jim F.]

So many of these disasters are associated with corporate America's belief in 'plug and play' CEO musical chairs. The failing CEO is jettisoned with a huge severance package and is immediately snapped up and given opportunities to destroy yet another firm.

Ye olde "reorganization" circle jerk: "Shake the tree, the monkeys all fall out, then climb back into the same tree and sit on different branches."

 

[Hem]

I own plenty of products by those companies, Stone glacier being at the top of my list of hunting gear and backpacking gear. I’ve been a faithful supporter of Simms and will continue to be until proven otherwise.

Bob
I think we have shared our approval of SG in the past. I have a contact associated with SG. It has been communicated the original owners will still be heavily involved with design and quality control...but only for a couple years. Then they wash their hands and are done.
Might want to stock up before things change up.

 

[SurfnFish]

Hard to imagine the entire product line won't be made in China by some point.

 

[BriGuy]

First we'll need to do some testing to determine if you're enough of a functional sociopath to fill such a position

Yes, please use the terms "Synergy", "Leverage", "Pivot", and "Robust" in a sentence.

 

[Bob Rankin]

Bob
I think we have shared our approval of SG in the past. I have a contact associated with SG. It has been communicated the original owners will still be heavily involved with design and quality control...but only for a couple years. Then they wash their hands and are done.
Might want to stock up before things change up.

Thanks for the heads up Hem

That is disappointing. There are a few more pieces I need to get, then I’ll just have to take care of my gear.

 

[krusty]

Yes, please use the terms "Synergy", "Leverage", "Pivot", and "Robust" in a sentence.

Throw in 'core competencies', 'breaking down silos', 'metric driven', 'nexus' and 'sustainability' and you're in....

 

[BriGuy]

Throw in 'core competencies', 'breaking down silos', 'metric driven', 'nexus' and 'sustainability' and you're in....

Ding, ding, ding, winner! You have the leadersip ethos to right-size our strategy and chart a new course for a brighter horizon.