I thought I’d wait until I commented because I was hoping for some more details from Amer Sports. I asked them, but all I got was the comment you’ve seen from their interim report published on April 23rd.
“In March, Amer Sports divested Nikita and Bonfire brands to CRN Pte Ltd. The combined net sales of Nikita and Bonfire in 2014 was EUR 9.8 million. The divestment has no material impact on Amer Sports’ financial results.”
CRN is apparently a Singapore company, but a cursory internet search didn’t lead me any further information.
So why did they sell? Amer Sports 2014 revenues totaled EUR 2.229 billion. Nikita and Bonfire together, during the same period, had revenue of EUR 9.8 million. That’s less than one half of one percent of the total. O.44% to be exact.
Remember that Amer also owns Salomon. Salomon already owned Bonfire before Amer bought it. Nikita was acquired by Amer in 2011.
A reader of mine saved me some trouble and found the quote below from Amer when they bought Nikita.
“Amer sports acquired Nikita ehf, a snowboarding inspired action sports apparel brand which focuses on female consumers, on December 16, 2011. Annual net sales of Nikita is approximately Euro 8 million. Total purchase consideration was Euro 6.5 million, out of which Euro 1.6 million was allocated to Nikita’s trademark and Euro 3.3 million to goodwill. The acquisition of Nikita enables Amer sports to enter and invest into new business category where it had no strong presence in the past. As Nikita’s closing accounts at the date of the business combination have not been completed, the purchase price allocation is a draft and it will be finalized in 2012.”
You may recall that Nikita original tag line was “Street clothing for girls who ride.” I thought that was simply the best brand defining slogan I’d ever seen. I said that in one of my articles years ago. Then, having positioned the brand so well in the female riders market, they decided to make male clothing.
I guess that didn’t work out so well.
But what’s particularly interesting, as I’m sure you’ve noticed, is that Nikita was doing EUR 8 million at the time it was bought by Amer, but both Bonfire and Nikita had consolidated revenues of EUR 9.8 million in 2014. That implies quite a decline in either one or both brands.
I’m guessing Amer bought Nikita to be complimentary to Bonfire. But after investing some money and effort and not seeing results, they decided it wasn’t worth the trouble. I think they’re right.
Bonfire and Nikita are two brands I like and both have, or at least once had, solid market niches. I’d be curious to know just what happened and whether it was market or organization related.