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Vista plans to sell its firearm brands before Bell/Giro/Blackburn

Published August 9, 2018
Companywide sales were down 7 percent in recent quarter; executives discuss sell-off plans and potential impact of trade war.

FARMINGTON, Utah (BRAIN) — Vista Outdoor sales were down 6.6 percent in its most recent quarter and in an earnings call Thursday company executives gave some insights on their plans to sell off its Bell, Giro and Blackburn brands.

Companywide sales were $529 million in its fiscal first quarter, which ended July 1, down from $569 million last year. In its Outdoor Products business unit, which includes the bike-related brands and CamelBak (as well as hunting and fishing accessories, outdoor cooking, golf range finders and standup paddleboard brands), sales were $271 million, down from $290 million in the same quarter last year.

In that division, the company said it experienced lower sales of hunting and shooting accessories and declines in sports protection and hydration due to “softness in the specialty channel.” Those declines were offset by growing sales in outdoor cooking, where Vista owns the Camp Chef cook stove brand.

Vista announced in May that it planned a major restructuring and refocus that includes selling its Savage and Stevens firearms brands, its Jimmy Styks paddleboard brand, Bell, Giro and Blackburn, the Copilot bike baby carrier brand, and the Raskullz and Krashco helmet brands. It said it would retain CamelBak, Camp Chef, and Bushnell, as well as its ammo' brands.

Vista had previously announced that it planned to sell its Bollé, Cebé and Serengeti brands, and in July it reached an agreement to sell them to a private equity group for $158 million. While those brands are primarily known for their eyewear, Bollé also sells bike helmets.

In a conference call with investors Thursday morning, Vista executives said that with the eyewear brands disposed of, they will now turn their attention to selling the other brands, starting with Savage and Stevens.

“We feel approaching the sales of these units in a sequential manner makes the most sense,” said Vista CEO Chris Metz. He said Vista has received interest from potential buyers of both segments.

Following the Parkland High School shootings in February, some specialty retailers canceled orders of Vista products due to the brands' connection to the firearms industry and support for the NRA. Some claimed victory with the May announcement that Vista was selling off some of the brands, although the company said it began developing the restructuring plan months before Parkland and the protests. In May company executives said the canceled orders had little financial impact on the company. Vista did not mention the boycotts on Thursday.

A spokesperson for REI, the largest retailer to cancel Vista orders, told BRAIN on Thursday that the coop's relationship with Vista remains "on hold."

Vista also has been affected by the Trump administration's tariffs, both enacted and proposed.

Commodity prices of steel and aluminum are critical for an ammunition maker, and Vista said the increased costs of steel were squeezing its margins even before a 25 percent tariff on imported steel went into effect in March. However Metz said the company has seen some ups and downs in commodity prices and has managed to lock into lower prices at times to mitigate the impact.

Vista’s Bushnell brand imports rifle scopes from China that were included in the administration’s initial proposal of $50 billion worth of Chinese imports subject to a 25 percent tariff. Additionally, at least some Bushnell golf range finder GPS units are manufactured in China and were on the list, included under the same import code that includes China-made bike GPS units.

The administration's final list removed two out of the three import codes involving rifle scopes. However, the GPS units remained on the list and that tariff took effect July 6.

The next round of proposed 25 percent tariffs, on $200 billion in Chinese goods, will include helmets, obviously a critical part of Bell and Giro’s business.

“I’m led to believe that just about everyone in the world sources helmets from the country of China,” said Metz on the investor call. However, he said, “helmets is a safety category and it’s hard for us to believe our government would want to put a tariff on a safety product … but it’s anybody’s guess as to what the administration is going to do.”

Camp Chef also imports a variety of items from China that are on the list, including stoves, camp tables and dutch oven parts. Camp Chef's vice president has requested to speak at this month's hearings on the tariffs. 

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Topics associated with this article: Tariffs, Earnings/Financial Reports

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