Vista Outdoors and its recent acquisitions might be the recipe for success
Do consolidation strategies really work in the outdoor equipment category? In some cases, yes. In a lot of cases, no. Much depends on acquiring the right assets, at the right price, and implementing a focused and sensible integration and execution strategy, post transaction. While the failed consolidations are plentiful, there are a handful of successes: VF Corp, Columbia, Wolverine Worldwide, to name just a few. But the hard goods category is far more difficult to consolidate than apparel and footwear.
Vista Outdoors has recently made several smart acquisitions in the outdoor category, especially its recent purchases of both Camelbak and Bell-Giro. Both acquisitions provide #1 market share brands in respective categories, and the combination provides not only a coveted authentic brand portfolio, but also critical mass to drive operating scale, cost and revenue synergies and access to important new distribution channels (IBD, REI and specialty outdoor). Importantly, it provides much needed diversification from the traditional hunting category. If the company’s sharp-minded senior management can retain talent and keep the proverbial "foot on the gas" in terms of product innovation, they will be a force to reckon with in the industry.
But how will investors measure success (or failure)? Beyond acquiring a portfolio of assets, the key barometer will be driving measureable and consistent same asset performance in terms of sales growth and profit margins, post transaction. Easier said than done, but the team at Vista have the right mindset, experience and talent pool to be one of the exceptions.