HELSINKI, Finland (BRAIN)—Mavic reported a 21 percent drop in net sales for the first quarter, blaming the decline on sharply lower orders from OE manufacturers. Mavic, a division of Finland’s Amer Sports, said manufacturers, distributors and retailers, anticipating a soft market this year, slashed orders and inventory in anticipation of slower sales.
First quarter revenue was 27.2 million € or approximately $36 million. Complicating Mavic’s first quarter was the Feb. 4 recall of its highly regarded R-SYS and R-SYS Premium front rims laced with 16 carbon-fiber spokes. Reports of them breaking led to a CPSC recall affecting upwards of 12,000 units. The full retail cost for a rim can range from $650 to $700.
In its quarterly report, Amer’s president and chief executive officer Roger Talermo said the recall forced a temporary capacity constraint on the company’s production of high-end wheels. However, he reported a brighter picture for the company’s new line of shoes, apparel and accessories. “This is the first year with Mavic-branded apparel and gear in the markets, and their sales are progressing according to expectations,” he said.
Last year the company reported net sales of 1.6 billion € or approximately $2.2 billion. Mavic’s net sales for 2008 were 114.2 million € or approximately $161 million worldwide. Amer’s Mavic division sales comprised about 13 percent of the company’s total net sales in 2008.
“The sporting goods business entered 2009 under the same cloud of uncertainty that is oppressing almost all consumer businesses,” Talmero said. Retailers are extremely cautious when ordering new products and consumers are moving to lower price-point products, he added in a statement released with Amer’s first quarter report.
Amer owns seven major international brands—Salomon, Wilson, Precor, Atomic, Suunto, Arc’terx and Mavic. Mavic’s U.S. offices are in Haverhill, Massachusetts.
The company took control of Mavic with its purchase of Salomon in 2005.