Simms Bought for $192 Million
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I need to leverage my synergy with the other Seahawk fans here, and pivot to trolling Rams fans in a more robust manner.
Am I hired ?
BriGuy
Life of the Party
I need to leverage my synergy with the other Seahawk fans here, and pivot to trolling Rams fans in a more robust manner.
Am I hired ?
Sorry, but that job has been sent offshore.
Your qualifications are impeccable, however.
Simms has been more important to the industry than whatever its future status might be. We are lucky to have so many good and high quality products available for out little niche hobby.
Early in my fly fishing endeavor the only decent rain coat was Helly Hanson. It still keeps the rain out and all the sauna-like sweat bath in. The choice in waders was limited to Hodgeman, Marathon, and Seal Dri. And none of those was ever a very good fit. And the only good wading boot was Russell, made of leather and wool felt sourced from the supplier to Steinway pianos, and took forever and a day to dry out. Then Weinbrenner came on the scene, and those were wonderful. And finally Simms and all the rest. We got it plush and easy friends.
Early in my fly fishing endeavor the only decent rain coat was Helly Hanson. It still keeps the rain out and all the sauna-like sweat bath in. The choice in waders was limited to Hodgeman, Marathon, and Seal Dri. And none of those was ever a very good fit. And the only good wading boot was Russell, made of leather and wool felt sourced from the supplier to Steinway pianos, and took forever and a day to dry out. Then Weinbrenner came on the scene, and those were wonderful. And finally Simms and all the rest. We got it plush and easy friends.
Wading in a rubber bag
But you could patch holes with duct tape and use a bungy cord for a wading belt. Ahh...the good old days!
There's a lot of corporate speak and financial hijinkery in that press release, but "Vista" will be retaining ownership of Simms and then rebranding the new parent company holding the brands that it is keeping as "Revelyst" (wonder how much they paid to come up with that name). The company will be publicly traded. The current Vista Outdoor CEO will assume the same role at Revelyst. So, ultimately, probably not much will change...maybe even better focus on the core group of brands they end up keeping.
Mukman
Life of the Party
OK, but let's not be too hasty here.
Imagine you're the CEO of Vista. You just paid $193M for a premium brand of fishing gear, which represents somewhere between a .5 and .8 multiple of annual revenue. You're going to trash the brand after you've arguably overpaid? Cutting costs in quality and warranty will not improve your investment. You really need to prop up what created the brand in the first place, rather than trashing it. If the end result is as many of you speculate, it would have been much more fun to just take $193M in hundred dollar bills and light them on fire.
Imagine you're the CEO of Vista. You just paid $193M for a premium brand of fishing gear, which represents somewhere between a .5 and .8 multiple of annual revenue. You're going to trash the brand after you've arguably overpaid? Cutting costs in quality and warranty will not improve your investment. You really need to prop up what created the brand in the first place, rather than trashing it. If the end result is as many of you speculate, it would have been much more fun to just take $193M in hundred dollar bills and light them on fire.
I agree, but it happens frequently enough. Try to save money to cover some of the costs of acquisition and then end up losing money when sales decline due to the product not being what it was. I think this would be especially true for Simms because quality, real and perceived is what drives the sales when there are so many lower cost, somewhat lower quality alternatives in the marketplace.
It also just becomes part of a portfolio. A lot of times the trashing of a brand and getting it to bare bones is part of the strategy. I don't fully understand it but I've had it explained to me a few times that it's actually more intentional than it looks.
Mukman
Life of the Party
Obviously, we will watch this play out, and you may certainly be right. But, if your strategy is to trash the brand by lowering quality to save money, it begs the question: Why spend $193M (again, a high price given the actual revenues of Simms) in the first place? If you get into trouble with revenues in the future, don’t dynamite the quality - maintain the brand and sell it to someone else at a smaller loss than completely driving into the ground.
Now you're just trying to make sense. Not everyone with a business degree does. Businesses go gunnysack all the time because someone made poor decisions.
Vista has had massive layoffs across their portfolio over the last few months. I have friends at both Bell and Fox that have lost their jobs. Buy, buy, buy, then break it down. Seen this all too many times with cycling and action sports companies that get swooped up by big investment firms.
First you jettison the least profitable parts of the business and concentrate on the areas with the highest returns.
And to an earlier challenge, yes, I do understand commitment to quality. It fits right in there below commitment to earnings. You don't stay in business very long if it's costing you $101 to produce a product you can only sell for $100, nor does it work if at the end of the year, you have 100,000 unsold units. In either scenario, something's got to give and it won't be earnings.
You're thinking too much of Simms as a standalone entity. This type of outfit sees Simms as an addition to their portfolio, nothing more.
Yes, .223 ammo seems to be either not available at some places or approx $0.50 a round or more.
