Monday, February 25, 2008

The Edsel of Hockey

Hockey Fan, and Investor, Buys Bauer From Nike:

As a child in Montreal, W. Graeme Roustan regularly received hand-me-down Bauer hockey skates from his older brother, and he has continued to buy Bauer Supreme skates ever since.

But on Thursday, Mr. Roustan, now a private equity investor in Florida, made a bigger purchase, buying the Bauer operation from Nike for $200 million.

Mr. Roustan, whose holdings include companies that make ice rink equipment, spoke of his passion for the Bauer name on Thursday, but there was much less excitement for Nike shareholders. The price paid by Mr. Roustan and Kohlberg & Company, an investment firm based in Mount Kisco, N.Y., is well below the $395 million Nike paid for Bauer in 1994.


You buy an asset, hold it for fourteen years, and sell it for HALF the price you paid? That's almost as bad as McClatchy's "investment" in the Star Tribune.

When Nike acquired Bauer, inline skating was at its faddish peak in the United States. A critical component of the company's strategy was to transform that into a following for hockey played on concrete using inline skates.

But inline hockey did not develop as anticipated. More important, Nike learned that performance was more important than styling flair in hockey gear.


This ain't basketball people.

Eventually Nike corrected its product missteps and maintained Bauer's lead in the skate market. But its early products made the Nike brand the hockey industry's rough equivalent of the Edsel. Eventually Nike was killed as a stand-alone hockey brand; only its swoosh logo now appears next to Bauer's name on products.

As someone who once owned a pair of Nike hockey skates (hangs head in shame), I can testify to their lemony qualities. I didn't buy them because of their Nike "flair" though. I bought them because they were greatly discounted and I couldn't pass up the "bargain." It was yet another painful (literally) lesson in getting what you pay for.

It's nice to see the good name of Bauer back in the hands of someone who knows hockey.

2 comments:

  1. It's a good thing that management now knows what its doing. It would have been tragic never to see another pair of Bauers at the local skate shop again.

    ReplyDelete
  2. Hockey is my true sport because I grew up in Canada loving the frozen fish pond over their at the back of our house. I use my old skates and this write up just reminds me of them. You're correct, taht brand actually produces the good stuff.

    ReplyDelete