Vista Outdoor has announced its strategic business transformation plan. Designed to allow it to focus resources on pursuing growth in its core product categories – around shooting sports and the outdoors – the company plans to explore strategic options for assets that fall outside of its core product categories. This includes a potential disposal of its remaining sports protection brands such as Bell, Giro, and Blackburn, as well as Jimmy Styks paddle boards.
Vista Outdoor originally acquired cycling brands Bell and Giro in 2016. In recent months, a backlash from the cycling community has arguably put some pressure on Vista Outdoor to consider a disposal. Some cyclists have been vocal about Bell and Giro’s owner being wedded to shooting and its support of the NRA in the United States.
Vista Outdoor’s plan is a result of a comprehensive strategic review, which began in November 2017. A company release noted that it expects that the execution of this process will ‘significantly reduce the company’s leverage, improve financial flexibility and the efficiency of its capital structure, and provide additional resources to reinvest in core product categories, both organically and through acquisition.’
“Our review identified product categories that are core to the company’s long-term business strategy,” said Vista Outdoor Chief Executive Officer Chris Metz. “We believe future investment should focus on categories where Vista Outdoor can achieve sustainable growth, maximize operational efficiencies, deliver leadership economics, and drive shareholder value.”
In conducting the strategic review, Vista Outdoor management defined several criteria to evaluate whether individual product categories are part of the company’s core. Vista Outdoor evaluated brands within its current portfolio based on their ability to do the following:
Serve the company’s target consumer – the outdoor enthusiast
Create cross-selling and other similar synergy opportunities
Achieve market leading positions and leadership economics
Demonstrate omni-channel distribution capabilities
As a result of this evaluation, and with support from its board of directors, Vista Outdoor will focus on achieving growth through its ammunition, hunting and shooting accessories, hydration bottles and packs, and outdoor cooking products.
“Vista Outdoor is excited about the potential of each of our core businesses, particularly ammunition, which is our largest core business.” said Metz. “An increased focus on our heritage ammunition business will manifest itself in more innovative and breakthrough new products introduced over the next few years. We also anticipate that by prioritizing this business, we will be able to invest more capital to further enhance and expand our global leadership position.”