If you haven't heard, things aren't all rose petals and daisies for the powersports industry. At least, not for a handful of the larger players.
After years of making money hand-over-fist thanks to Covid lockdowns and low interest rates, the good years are coming to a close and the bigger companies are doing everything they can to stay afloat. Markdowns have been spread far and wide across lineups, layoffs have occurred in both small and large shops, lineups have been paired down, and everyone's been eyeing what else they can do to stop the hemorrhaging.
I mean, Harley took a sizeable bag of money from the feds to keep its flailing LiveWire electric motorcycle brand afloat.
But one company that's seen a few too many headwinds, despite having a stellar lineup, is Bombardier (BRP), the parent company of Can-Am, Ski-Doo, Sea-Doo, and a host of others. And it's now taking drastic actions by selling off its maritime arm, minus Sea-Doo, in a bid to keep its core demographic business, ahem, afloat.
I'll sea myself out.
The company only relatively recently got back into boating, within the last five years, but because of soft demand across the industry, it's stated that it'll focus more heavily on its performing brands, i.e. Can-Am, Ski-Doo, and Sea-Doo. The sale process, which started yesterday on the heels of the announcement, will be for the brand's Alumacraft, Manitou, Telwater (Quintrex, Stacer, Savage and Yellowfin) brands. Notably, that doesn't involve Sea-Doo, which consists of the brand's PWC (more commonly referred to as jet skis, though Kawasaki owns that particular branding), and a select few pontoon boats.
According to the release, “After careful consideration and given the current dynamics of both the Marine and Powersports industries, we have decided to double down on our core Powersports activities and to sell our Marine businesses,” stated José Boisjoli, President and CEO of BRP, adding, “Over the past few years, we have built a solid foundation by investing in the development of innovative Marine products and upgrading the production facilities. As such, we believe that these iconic brands can offer attractive value creation opportunities for a new owner.”
The news of the sale come after BRP laid off over 100 employees earlier this year, as well as downsized its projected revenue late last month. As for the reasons behind such a downgrade, there are numerous variables to consider. Interest rates have risen and then stayed relatively flat for a long period, consumer confidence in the economy is at an all time low, there's a looming US election that tends to through consumer spending into chaos (apart from guns and ammunition) and global warming produced an unseasonably warm winter last year driving down snowmobile sales.
None of that is good for a company that specializes in outdoor toys that costs near-enough a new car these days. So selling off the brands that don't exactly jive with the rest of your lineup makes a lot of sense, as it hones the messaging, and potentially drops a fat stack in your lap to cover some of the rising costs of the year of our lord 2024.
We'll just have to wait to see if it all pans out.
