Yesterday Brunswick Corp. announced it plans to divest its bicycle, camping and fishing businesses because those units are not meeting the company’s
Sales from the businesses to be divested totalled $478 million in 1999, or 11 percent of the $4.3 billion reported by the company last year.
The decision to sell is due to the newly elected chairman and chief executive officer, George Buckley who replaces Peter Larson who has retired.
Buckley wants ouf of bikes because they dont make money quick enough. When Brunswick diversified into bikes it did so because of environmental concerns about the future of petrol-driven outboard motors, which is where Brunswick is strongest. However, two CEOs down the line, the decision to diversify into areas geared differently to the boat trade is now seen as a mistake.
Brunswick bought into brands and not just the bike brands that were made in the USA. Far Eastern competition soon forced Brunswick to source overseas and, in Buckleys phrase, reduce headcount.
But in a press statement Buckley says the outsourcing and sackings have not been enough:
"These actions have not been sufficient to outweigh the effect of continued pricing pressure from low-cost Asian imports and weak market conditions in the bicycle, camping and fishing segments. We have, therefore, decided to divest these businesses."
Mongoose was coming back into profit but not fast enough for the new Brunswick management.
Neil Murray of Mongoose importer Hot Wheels International isnt phased by the divestment talk:
When one door closes, another one opens. Every time the business has changed hands we have benefitted.
Brunswick Corp. is the third owner of Mongoose that Hot Wheels have worked with.