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Amer places Mavic 'under review' as it updates its strategy

Published September 5, 2018

HELSINKI (BRAIN) — Amer Sports says its Mavic cycling business is "under review" as Amer updates its strategy and looks to focus its portfolio of brands, which includes Salomon, Arc'teryx, Peak Performance, Atomic, Mavic, Enve, Suunto, Wilson and Precor. It was not clear whether Amer's other cycling brand, Enve, is also under review.

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Mavic has been an underperformer among Amer's brands in recent years. In its financial reports, Amer generally lumps together Mavic and Enve (which Amer bought in 2016 for about $50 million) as its Cycling division, without specifying the individual performance of the brands.

However, in commenting on Amer's 2018 first-half financial results in July, president and CEO Heikki Takala singled out Mavic, saying the company's "legacy aluminum wheel business" was weighing down results in the Cycling division. He said Mavic's apparel and helmet businesses were performing well, as were carbon wheels, but that Mavic had more aluminum wheel manufacturing capacity than it could use and OEM orders for alloy wheels were lagging.

In the first half, Amer's Cycling division reported sales of about 60 million euros ($70 million) down 13 percent from the same period in 2017.

On Wednesday, Takala said Amer was continuing to prioritize "Softgoods, Business to Consumer, China, United States, and digitalization." But he also said Amer was looking for "areas of faster growth, higher profitability, and better asset efficiency, first through the integration of the acquired Peak Performance business, and by the choice to focus the portfolio with the decision to place the Mavic cycling business under strategic review. Today Mavic represents approximately 3.5 percent of the (Amer Group) sales."

The company said it will release more details about the updated strategy at an event in Helsinki on Thursday. 

In the U.S., Mavic and Enve have moved toward separating their operations recently. Amer appointed Isaac Wilson as Mavic's North American commercial director, giving Mavic its own U.S. manager for the first time in several years. Previously, Sarah Lehman had overseen Mavic's U.S. operations, in addition to being CEO of Enve, where she remains. 

Mavic also moved its North American headquarters out of the space it has shared with Enve in Ogden, Utah, and into a new headquarters in Park City, Utah. With the move, Mavic hired its own staff for customer service, dealer service, service course, warranty and repair, instead of sharing those operations with Enve.

 

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