Marquee Image: Former K2 athlete and original freekier Scot Schmidt prepares to drop The Chimney at Squaw Valley, California, in the early 1980s. PHOTO: Larry Prosor
Newell Brands, a global consumer goods company, announced plans this morning via a press release to sell about 10 percent of its portfolio, including several businesses such as K2 Sports, Marker/Volkl, BCA, Line Skis, and Full Tilt. If Newell can't find buyers midway through next year, these brands, which CEO Michael Polk has referred to as "distractions," could face the chopping block.
Skiers are good with uncertainty. Will this old cheese make me puke? Eh, worth it. Will this cliff drop wreck me? I hope not, but let's see. But the news from Newell introduces a whole new level of unknowns. What will come of some of skiing's most iconic and longstanding brands? Major uncertainty looms.
Alex Draper, vice president of global marketing at K2 Sports, wrote in an email to POWDER today, "It's business as usual at K2 Sports worldwide. We continue to invest in equipment, people, and programs to insure the success of our portfolio of brands. Our people remain focused on customer and consumer needs and look forward to a promising future."
Draper also reported that delivery of the winter 2016 winter product line is nearly complete, and its 2017 collection is currently being presented to retailers.
Requests for comment were not immediately returned from officials at Volkl/Marker, and a marketing manager from Line/Full Tilt responded to an inquiry with the same statement as Draper.
This spring, Newell Brands, which also owns Rubbermaid, Sharpie, and Paper Mate, acquired Jarden Corp., which had purchased a host of ski brands back in 2007. Shortly after the acquisition, Polk said he planned to restructure the company's portfolio, cutting the fat and divesting in the name of "cost synergy," "value creation," and other business goals.
There's not necessarily any reason to panic, yet. Newell will most likely find buyers—or, at least, it has great incentive to. Management hopes to pay off debts with proceeds from divestitures, and it ain't cheap to shut down or liquidate a business. It's far better to sell a functioning business, which describes most of Newell's ski businesses. Jardin reported that its outdoor solutions segment, which included ski brands, generated reported operating earnings of $34.1 million in 2015 (which pales in comparison to the “branded consumables” segment). Despite recent internal changes at K2—staff turnover, dropping skiers like Seth Morrison and Andy Mahre from the roster—there's no indication that Newell is worried about finding a buyer. These brands have serious history, name recognition, and a reputation for quality, all of which will make them attractive properties. Volkl is over 90 years old. K2, recognized as the most iconic American ski brand ever, is over 50. And though nine months might not seem like a lot of time, the business world can move fast.
Still, the announcement puts brands in a weird limbo—right now, they don't know if they'll be sold, or what resources will be available in the future. But in all likelihood, buyers will be found, the show will go on, and storied ski heritage will endure. For many skiers, the alternative is hard to imagine.
This story will be updated as more information is made available.