Global Economic Crisis Depressed Sales & Reduced Profit Margins of Water Sports Apparel Companies, Claims Textiles Intelligence18 Mar 2013 • by Natalie Aster
Adverse conditions in the water sports apparel market are leading to a rise in industry takeovers. According to the report “Water Sports Apparel: Innovation Keeps Brands Afloat” by Textiles Intelligence, many companies enjoyed massive growth until the mid-2000s but the global economic crisis has depressed sales and reduced profit margins. In addition, lower participation rates in some water sports and changing consumer tastes have had a knock-on effecton demand and sales of water sports apparel.
Water Sports Apparel: Innovation Keeps Brands Afloat
Published: March, 2013
Price: US$ 520.00
As a result of weaker demand, major players in the water sports apparel market have been forced to cut back on their operations and re-evaluate their businessstrategies. Also, a number of players have experienced declines in their valuations,and some of those declines have been quite dramatic.
Consequently, large corporations and private equity groups have taken advantageof these lower valuations by launching bids for struggling brands and acquiringthem.
Volcom, for example, was acquired by PPR, a France-based luxury goods and retaildistribution group, in May 2011.
Another company which has received a number of takeover offers is the Australian surfwear company Billabong.
In December 2012 the head of Billabong's Americas division, Paul Naude, and two bid partners - the USA-based private equity firm Sycamore Partners and Bankof America Merrill Lynch - offered A$526.8 million (US$553.1 million) for Billabong.
However, in January 2013 VF Corporation and its private equity partner Altamont Capital matched Paul Naude's bid with an offer of A$526.8 million. The two biddingconsortiums are currently carrying out a due diligence process.
Another company up for sale is Rip Curl, one of Billabong's major Australia-basedrivals. The company is said to be considering a number of unsolicited offers.
In a further bid to boost sales in this difficult economic environment, companiesin the water sports apparel market are continuing to develop garments which enhancecomfort and improve a wearer's safety. Companies which have paved the way inimproving the functionality of their water sports apparel include Billabong, Musto, O'Neill, Patagonia and Quiksilver.
These and other companies will continue to focus their efforts on increasingthe number of innovations they bring to consumers. In this way, they hope todifferentiate themselves in what has become an overcrowded marketplace.
Other reports published in the same issue include:
- Profile of Musto: a Premium Nautical Apparel Brand
- Performance Apparel Markets: Business Update, 4th Quarter 2012
- Performance Apparel Markets: Product Developments and Innovations, 4th Quarter 2012
More information can be found in the report “”Water Sports Apparel: Innovation Keeps Brands Afloat by Textiles Intelligence.
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