Wednesday, January 25, 2006

SCOOP - Montrail to be acquired

The big buzz among online trail runners today was that Montrail is being acquired by one of the billion dollar shoe brands. Montrail has been one of the pioneering brands of trail and ultra running and has stuck close to the low-key essence of the sport, so it’s no surprise that runners are worried that an acquisition will “corporatize” the company they have come to love. Can you imagine what glitzy Phil Knight from Nike would do to an ultra running brand?!? It’s enough to make you chunk your breakfast.

That being said, my guess is that it isn’t Nike. It’s probably New Balance. Here’s my theory:

Adidas-Salomon and Reebok merged, combining the #2 and #3 players to finally building a solid contender to Nike. Adidas is a marketing powerhouse (and has the adventure-friendly Salomon brand as well), and focusing that energy on expanding Reeboks style brand is going to take 105% of their energy. Big mergers are tough – probably not the best idea to tack on another brand.

Nike’s stock price is stagnant, and they recent canned their CEO. Adidas is whomping their ass in Europe and Japan, two high-growth markets where Nike's swoosh has traditionally dominated. Usually in periods of transition and core market erosion, you don’t take on an acquisition like this. Besides, Nike is doing well with the trail running line, and has a solid cost structure from hiring slaves in third world countries (ha, ha).

But what about New Balance? Great company, great products, but they just became a seriously small #3 to Adidas/Reebok and Nike. They need to bulk up and build out their brands. From a cultural perspective, who better to acquire Montrail? New Balance has their whole “For Love or Money” campaign – if any company is going to fit into the ultra world, it would be these guys.

I can only hope that whomever the acquirer is, they appreciate the time and effort Montrail puts into their race series, their ultra teams, and their support of the trail running community. It would be a massive loss to have this thrown to the wayside in the name of profits.

I’m sure we’ll here more in the next couple of days. My apologies for getting all MBA on you guys, but I found the prospect fascinating. And if I’m right, you heard it hear first!!!!

- SD

[See comments below - it was confirmed late on 1/25/06 that Montrail was being bought, but my guess on acquirer was...DEAD WRONG!!! I'm such a rookie. ;-) It turned out to be Columbia Sportswear, home of Columbia, Mountain Hardwear, Sorel, and more. You can find the press release here.]

18 comments:

  1. I don't know much about mergers and acquisitions, but here's my question - will this affect the price of shoes?

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  2. wow...i remember back when they were one sport. i still have some of their original trail shoes, a couple pairs of their hiking shoes and the classic moraine (that i still use to this day). we used to pimp their shoes and trail test them when i worked at a shoe place in washington. the crew in seattle was always awesome and were really interested in our feedback.

    i wish only the best on them. they've always been true to the sport.

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  3. Hopefully this means all the hard working people at Montrail are going to see a payday. I love my Hardrocks, and I think Montrail is one of the great outdoor brands.

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  4. How did you find out about this, Scott? I can't find anything online...

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  5. I hope Montrail continues to put their heart and soul into ultra running. Their support of the race community has been great.
    Sarah

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  6. No end of love for Montrail!

    I don't think an acquisition would affect the price of shoes. There is still plenty of competition in the trail running shoe sector. That is a good question though - usually industry consolidation can affect pricing.

    SD

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  7. Hey Scott,
    Just wondering if this news about the acquisition is from a reliable source. Awesome site btw!

    Chikara

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  8. It's Official, it is Columbia Sportwear buying Montrail.

    Aloha,
    Bob
    www.hurthawaii.com

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  9. Hi Scott,

    guess your 'analysis' was not quite 100% on target...but your 'scoop' was DEFINATELY 100%accurate :-)

    http://www.columbia.com/who/press_release.aspx?type=c&id=141

    Looking forward to your first race report of the year...and hopefully some nice fotos from Death Valley!

    Thanks,
    Mick (UK)

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  10. Looks like it's official! I was just way off on the acquirer (and btw, one industry insider pointed out to me that New Balance already has a trail brand - Dunham).

    I'm a huge Mountain Hardwear fan (they are owned by Columbia), so I get the impression Montrail has found a good home. And at $15m cash, SOMEBODY at Montrail is starting off '06 with a quality of life upgrade. ;-)

    SD

    PS - Chikara, if you are the "Chikara" I think you are (how many of there can there be?), I NEED to interview you, man! Send me an e-mail at scottdunlap (at) yahoo.com, and we can set it up.

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  11. a couple notes: 1.) I'm pretty sure Adidas spun off Saloman a while back.

    2.) As someone who works at Nike, I've gotta say "ouch" and your analysis was off on a couple points (lots of misinformation and propaganda is out there on us, not all true).

    I generally love the site though, and it's a free country so you're welcome to your opinion!

    Keep it up

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  12. Thanks for stopping by.

    No offense meant by the Nike joke (ha, ha).

    You're right about Salomon - they sold it to Amer Sports a few months ago. I hadn't caught that. Maybe it's best if I don't throw my two-beers-but-no-research opinions about the shoe industry out there anymore. ;-)

    SD

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  13. Here's more...

    http://seattlepi.nwsource.com/business/257238_montrail27.html

    Sounds like no products will change. Phew!

    SD

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  14. Scott,
    Yes, I'm probably the Chikara you're thinking of,unless you know a lot of Chikaras. I love New Balance gear so I was hoping that your prediction about the acquisition would be right. heh! Of course not at the cost of losing the Montrail culture. I personally think you should continue your "two-beers-but-no-research opinions," it starts off a great discussion topic.

    Chikara

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  15. Thanks, Chikara!

    Seriously, you should send me an e-mail at scottdunlap [at] yahoo.com. I've had some reader requests to interview you and see what's next on your race schedule!

    Thx,

    SD

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  16. I am a road-runner but interested in getting more into trails to get some more adventure and give my knees a break. Great blog, got any tips for a first timer?

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  17. Tips? You bet! Welcome to the wild world of trail running.

    Check out these blog entries to get started, and find some local trail runners to offer up tips in the area. Also, I found www.run100s.com to be very helpful.

    Trails vs roads
    Kristin Armstrong's first trail run

    Also be sure to peruse the race write-ups and interviews on this blog - I learn a ton from other runners and try to get it all in the blog.

    The best advice I got when starting was "slow down, have fun, and always carry a map".

    Have fun!

    SD

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