In a deal that rocks the French snowboard scene and continues to consolidate the overall market, the French-based Rossignol Group announced on Friday, December 17 that it had purchased the small French snowboard manufacturer Grand Chavin and brands Hot, Hammer, and A Snowboards. The details of the deal weren’t disclosed, but the companies had been working on something since April, previous to Grand Chavin going into bankruptcy.
With Rossi’s growth in snowboards and golf, its recent earnings grew in the first half of the year, and with the recent announcement, shares rose upward 1.9 percent.
SNOWboarding Business got an exclusive interview with Pascal Joubert des Ouches, Rossignol’s snowboard marketing manager, while at the TransWorld Media Snowboarding Industry Conference and Powderquest held last weekend in Whistler, British Columbia. Here’s what he had to say about the deal while riding a chairlift between snowboard runs on the mountain: What is the status of Grand Chavin and its brands Hot, Hammer, and A Snowboards?
Pascal Joubert: The marketing is done for 2001-02 and we have the intention to let them live their lives. First of all, they stay where they are in their small factory with all the reactivity and flexibility that are characteristics of a small company. This is also why they are very interesting for us because they can handle a small number of many different brands.
On an industry point of view, it has a direct interest for us. We intend to develop some synergies on the back-end industrial point of view with the buying of materials¿which should give us a much more powerful position with the material suppliers.
Then if we talk about the synergy of the product, first of all we must say that we need the people from Grand Chavin, Hot, Hammer, and A Snowboards to be involved because we need snowboarders. The Rossignol group is understaffed, so we need new blood to grow, and we need Regis Rolland, founder of A Snowboards to keep his baby alive and to be the guardian of the spirit for A Snowboards.
Where will the growth come from?We intend to make these three brands grow inside the group with separate distribution. We have several months to look at all the synergies we can develop in terms of product we can offer.
But one thing is sure is that they will physically stay different from us. We’ll develop a different network of distribution and we will back it with Rossignol finance¿which they never had because they were so small they couldn’t get sufficient money to run their business at an international level.
We think we can bring them some extra power to make Hot, Hammer, and A Snowboards grow in Japan and the United States¿where they are quite unknown. Well, except in Japan where Hammer and Hot had a fair presence because of their Alpine past, but now they are a more boardercross-oriented brand.
We could develop step-ins for Hot and Hammer, and we have many ideas, but we don’t have to rush. We will take our time to cope with the people to understand the spirit of the brands. How long have you been working on the deal?
We’ve worked on the deal since April, since before the Grand Chavin bankruptcy, because they were looking for some solution to avoid the bankruptcy and we were aware of it because we are neighbors.
We respect each other, even though we are competitors, and I personally know Hubert Chavin from the past. When I was working for Bic Sport, we had a project together develop a UP Snowboard and a Bic Snowboard. They were supposed to be manufactured by Grand Chavin, but that deal went nowhere. He’s a nice guy.
What were the terms of the deal?
I can’t discuss them.
Will we see the brands at SIA?
As I said, we don’t know everything in detail yet. In the next couple of weeks we might make the decision if we spot that there is a decent way or opportunity to present them in a good way. We’re not going to rush and do something crappy. We would prefer to not to be he if we are not set up and our staff isn’t prepared our to be as strong as possible.
What do they offer Rossignol? Is this a grab of marketshare? Does this make you the number-one company in France?
We’ve been the number-one company for a long time because we’re selling 20,000 to 21,000 boards under the Rossi name, plus 5,000 for Original Sin. Hammer sells 7,000 boards in France, which is a 65,000-board market.
But our target is not to be number one in France. We don’t care.
Is this move similar to that of K2 where it bought Morrow and Ride? Did this allow Rossi to gain marketshare by selling more brands instead of selling more of one brand to the same retailers?
That’s one of the components, but it’s a bit more tricky than that.We feel we have a huge gross potential under Rossignol and Original Sin. The reason we bought Grand Chavin is not because we cannot grow with Rossignol. It’s a completely different thinking process. We know we have the momentum with Rossignol. We are improving our marketing every year and the product is fine. We’re okay.
Rossignol is forecasting to sell 165,000 boards next year. We’re growing at a quick 30-percent rate. For Original Sin, it’s moving from 28,000 to 42,000 boards next year. Plus the boot-and-binding business is going well, and we tend to forget about those when we talk about statistics.
But the thing is by having these types of brands, we can develop niche marketing strategies like having a boardercross image for Hot snowboards. It’s a question of image. That brand has an Alpine, boardercross image and the market is small. But for Rossignol to keep carrying an Alpine board doesn’t make much sense because the market for this is Japan and the U.S. and we’re not going to succeed with this. But with Hot, it gives us a good, pure boardercross image.
For A Snowboards, it’s a small brand with pure snowboard legitimacy and the legend Regis Rolland. It’s not well known, but high priced, so it covers a different product-price position.
It’s also a way to be ready to withstand the leveling of the marketing growth and prepare for the market drop if that may occur. When the market starts to drop like in windsurf, the big mainstream brands were slammed because the last guy left in a dropping market is the most hardcore guy and that guy will never buy anything but a hardcore brand like A Snowboards. So you have a resurgence of hardcore brands when the market levels.
How do you be successful with so many brands?
It’s a question of niche marketing. It’s not a question of saying we can’t grow further. We have complete confidence that we can grow further and we have a big potential with Rossignol and O Sin, but Rossignol will never be a pure snowboard brand.
We are a ski and snowboard manufacturer and proud to be, by the way. And skiing is becoming cool again. Look at the skis in the pipe and with the new-school movement. We’re part of that game. We cannot hide from ourselves. We are who we are.
And A Snowboards has a different spirit. They are who they are and they will never be in the ski market. So it’s a question of adding a different image to suit the different consumer demand and be ready to fit the motion of the market. It also has some impact on the stock exchange because it says that we suddenly grew by 38,000 to 40,000 boards.
It shows our commitment in snowboarding. We are not a small player. With that deal we are number-two world wide in total number of boards produced, but not yet in image.
So you think this puts you in front of K2?
I think so. I don’t have the exact figures, but we were number three and now we’re number two. It’s a game. The main deal is in front of us.
Doing a deal like this is one thing, but the most difficult task is to execute and develop the synergies between the brands while keeping the souls of each brand different. But that’s the game. I think we can handle it as long as we have some reinforcements to our staff because we are understaffed.
There was one other reason. There were four companies bidding for the company, so we kept a competitor from getting the brands. are understaffed.
There was one other reason. There were four companies bidding for the company, so we kept a competitor from getting the brands.