Management buy-out for Dynastar?

Rumours about the future of Dynastar have been circulating for the past couple of years. The Sallanches (Haute-Savoie) based company, part of the Quiksilver stable (NYSE:ZQK), is the last major ski manufacturer in France. Their factory has a capacity to produce 450,000 skis per year. Quiksilver has seen its share price plummet faster than a downhill skier over the last quarter.

From October to early January the shares dropped from $15.13 to $7.32, a loss of more than 50%; causing consternation amongst shareholders. Analysts say the share price reflects concerns after the group announced at Christmas that it plans to hold on to Rossignol. In truth they may be having trouble finding a buyer for the ailing French ski maker. Rossignol has restructured over the past year, outsourcing manufacturing to Spain. Quiksilver also holds an eye watering $1.1 billion in debt at a time when easy credit is hard to come buy for businesses.

The “politburo” at Quiksilver has undergone a major reorganization in the last couple of days although details are hard to come by. Apparently Bernard Mariette, the president of Quiksilver has been moved in to head up Rossi, with Jean-François Gautier going sideways to run Dynastar. Mr. Gautier was brought into run Rossignol in 2005 after spending five years managing an investment fund. He knows the winter sports business well, he was President of Salomon, from 1990 to 1998. Is this all just a coincidence after the recent announcements by Salomon? Not according to journalist Antoine Chandelier who says that Gautier has been a frequent visitor to Sallanches over recent months. Gautier is described as a “enthusiast” but not a “businessman” and is apparently organizing a management buy-out of Dynastar along with other partners. His plan is to move the company up market but keep production in Sallanches, which employs 150 people, and also sub-contracts work from Rossignol. Has he been moved into his new job as part of this strategy? It is not a done deal as Quiksilver are said to be looking at other offers and will take what gives the best return to embattled shareholders.

Further Information

Dynstar 2008 Touring Skis
Quiksilver to dump Rossignol?

Posted by davidof on Wednesday, 16 January, 2008 at 07:30 AM

It will be a very sad day if my skis no longer can say “Born in the Chamonix Valley” on them .....

Posted by  on  Wednesday, 16 January, 2008  at 08:26 PM

Quiksilver has confirmed that the whole Rossignol group is up for sale. The stock dropped below $6 in trading yesterday (probably traders read our article on Google News and dumped the stock) but finished at $6.30.

Rossignol has suffered from very poor orders for the 2008 winter due to shops holding unsold stock.

Employees and locals in Sallanches are extremely worried, especially about a “Rover” solution where the factory is moved lock-stock-and-barrel to Eastern Europe or China.

Some more information in the Dauphine Libere, did Antonine read our comments about the Credit Crunch I wonder?

Posted by davidof on  Thursday, 17 January, 2008  at 11:00 AM

Quiksilver have engaged JP Morgan to help them in the sale of the hardgoods sector. K2 are apparently in the frame to buy Rossignol which would probably mean more outsourcing of ski production to China rather than to Dynastar’s Sallanche factory. Not good news for the French ski industry.

Posted by davidof on  Thursday, 31 January, 2008  at 11:24 AM

We have learned that Bernard Mariette, who was recently moved from running Quiksilver to Rossignol, has resigned. Mr Mariette was said to be described as pessimistic about the intentions of Quiksilver shareholders towards Rossignol.

Posted by davidof on  Thursday, 14 February, 2008  at 01:51 PM
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