Wading in a rubber bag
Simms Bought for $192 Million
- Thread starter GOTY
- Start date
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.
mattsavage
Steelhead
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.
Tinker
Smolt
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.
Americans Are Buying Huge Amounts of 5.56 Ammunition as Prices Surge 39 Percent
Amid the Israel–Hamas war and fears of a wider conflict, Americans appear to be panic-buying ammunition, data show.
www.theepochtimes.com
Vista deal is towards the end of the article.
Divad
Whitefish
I sent in some waders for warranty work with a note, and three flys that I really overdid in a small aluminum tin. Called today to check in and was told they’re not repairable but the repair technician loved them. The customer service agent is sending out a pair of the new style as a replacement.
Asked the agent his favorite method of fishing, of course he said drys so I had to ask him his second. Looks like I’ll tie up a couple streamers for him, maybe a skating dry fly pattern and one of the wood pen kits I made as a thank you.
Same good people in the Bozeman office even if ownership has changed. Remember to take the time to thank those that provide [quality] service. Our passion of fly tying and fly fishing is easily shared.
Asked the agent his favorite method of fishing, of course he said drys so I had to ask him his second. Looks like I’ll tie up a couple streamers for him, maybe a skating dry fly pattern and one of the wood pen kits I made as a thank you.
Same good people in the Bozeman office even if ownership has changed. Remember to take the time to thank those that provide [quality] service. Our passion of fly tying and fly fishing is easily shared.
wanderingrichard
Life of the Party
Well a lot of this is now moot. Vista has split into 2 to sell itself off, and the feds approved it. The big hang up was the sale of the ammunition side due to national security reasons. We have strict laws about foreign owners having control of things that are important should we end up in another World War situation.
Anyway here's the article;
gearjunkie.com
Anyway here's the article;
Remington, Bushnell, CamelBak, and More Sold as Vista Outdoor Ruptures
After sweeping acquisitions in the outdoor space, Vista Outdoor is set to cash in a $3.4 billion offload in two separate chunks.
gearjunkie.com
This GE business model bullshit just never ends.Well a lot of this is now moot. Vista has split into 2 to sell itself off, and the feds approved it. The big hang up was the sale of the ammunition side due to national security reasons. We have strict laws about foreign owners having control of things that are important should we end up in another World War situation.
Anyway here's the article;
Remington, Bushnell, CamelBak, and More Sold as Vista Outdoor Ruptures
After sweeping acquisitions in the outdoor space, Vista Outdoor is set to cash in a $3.4 billion offload in two separate chunks.
As usual, it's all about 'bringing maximum value to the shareholders', which most often means unrealistic expectations of maximum short term ROI....and when that doesn't pan out a new set of C-suite managers are hired (generally with no relevant market niche experience). Exiting managers receive huge golden parachutes...and move into other executive positions so they can fuck up those operations in turn.
Hell...even REI is installing directors with plenty of executive experience at places like Chipotle and Starbucks. Years ago they tried that crap by hiring folk that wanted to market lines of golf, tennis, and bowling equipment.
It's the way the business world works now. New company comes up and is successful. Private equity swoops in to buy it up and extract as much as they can before just letting it sit forgotten in their portfolio, or sell the husk off to someone else. Rinse and repeat.