Contacts: Sara Schmidt at 612-333-0130 x234 or Jeff McKenzie or Steven Anreder, Anreder & Company, at 212-532-3232
OUTLOOK FOR WINTER SPORTS INDUSTRY FAVORS STEADY GROWTH, SAYS MERCANTI REPORT
-------Market Driven by Increasing Apparel Sales, Favorable Demographics and New Technologies
MINNEAPOLIS, MN, January 23, 2007 – Unseasonably warm weather, icy conditions and thin snow cover, such as those being experienced early this season in the northeastern U.S., are not enough to put a freeze on growth in the winter sporting goods market, according to a new report by The Mercanti Group, a boutique investment bank headquartered in Minneapolis, with offices also in Los Angeles, New York and Seattle. “Snow sport manufacturers have come a long way in the last 20 years and, thanks to steadily increasing apparel sales, favorable demographics and new technologies, they are well-positioned to sustain growth over the next 20,” writes Mercanti banker Paul Marcus, an avid skier himself, in the firm’s monthly research publication, The Mercanti Chronicle. A full copy of the report is available at www.mercantigroup.com. The analysis notes that while the big ski brands have led the trend toward market consolidation, there is still room for additional players. “It is clear that what used to be a fragmented industry has become quite the opposite,” says Mr. Marcus. “Many of the companies featured in this Chronicle have built extensive product portfolios, positioning themselves for strong growth while, at the same time, diversifying out much of the risk inherent in a niche-focused business. They no longer exhibit extreme peaks and troughs with the changing of the seasons or weather patterns. “The top players have continued to stay ahead of the technological changes and consumer preferences,” Mr. Marcus writes. “The real opportunity in the alpine ski market over the past years, as well as the other major snow sport markets including snowboarding, telemark and Nordic, has been through consolidation, increased apparel and equipment accessory sales and related travel sales.” Mercanti’s report also points to several new trends currently benefiting the industry, including:
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A shift in demographics, which should occur within the next five years, meaning 25 to 34 year-olds will now become the majority, as compared to 35 to 44 previously. Strong growth in higher margined winter apparel benefiting specialty stores. Evolving technology that is widening interest in winter sports, including adoption of twin-tipped skis, one of the fastest growing equipment categories of late. The number of winter leisure trips taken increased 15% from 2000 to 2005, and further growth could result if the industry targets its growing consumer segments, including young singles and families with children. Strong apparel and accessories sales, which during the latest season accounted for 67% of winter sports sales, up 59% from the 1998 season. - more -
Winter Sporting Goods Market -- Page 2
Leading companies in this industry, according to the report, include Amer Sports (HLSE: AMEAS), a Helsinki company that is “arguably the world’s leading sports equipment company;” K2 Inc. (NYSE: KTO); Head NV (WBAG: HEAD); Quicksilver Inc. (NYSE: ZQK); The Forzani Group, Ltd. (TSX: FGL); privately-owned Redfeather; Volcom, Inc. (NASDAQ: VLCM); and Spyder Active Sports, Inc., also privately owned. About The Mercanti Group The Mercanti Group is a results-oriented boutique financial advisory firm that embraces a fierce commitment to client service and provides creative Merger & Acquisition, Capital Raising and Strategic Advisory solutions to small and middle market companies, private equity firms and individual business owners in the consumer, health care, technology, business services and manufacturing industries. Mercanti offers companies the expertise and capabilities of a large investment bank with the focus, attention and energy of a small entrepreneurial firm. Mercanti has offices in Minneapolis, Los Angeles, New York and Seattle. Mercanti also is strategically affiliated with Marquette Financial Companies, a diversified financial services company which is a part of the Pohlad family holdings. If you would like more information on The Mercanti Group, please visit the Web at www.mercantigroup.com, or contact a Mercanti professional at 612.333.0130 (Minneapolis); 310.444.0130 (Los Angeles); 212.883.0130 (New York) or 425.943.7280 (Seattle). ###