Did you hear?…Layoffs at Rossignol Group underscore challenges as company restructures
In an April 23 news release, the Rossignol Group confirmed previous announcements in late March that it would be laying off 30 percent of its workforce globally. In total, this adds up to approximately 450 people now out of work. SNEWS® requested information on how many of the layoffs occurred in the United States specifically, but was not told. It was reported in European news that approximately 275 of the jobs cut came from the French headquarters.
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In an April 23 news release (click here to read), the Rossignol Group confirmed previous announcements in late March that it would be laying off 30 percent of its workforce globally. In total, this adds up to approximately 450 people now out of work. SNEWS® requested information on how many of the layoffs occurred in the United States specifically, but did not receive numbers before we posted this story. It was reported in European news that approximately 275 of the jobs cut came from the French headquarters.
The Rossignol Group, which includes Rossignol, Dynastar, Look and Lange, reported a loss of EUR 58 million (USD $75 million) last year on sales of EUR 270 million (USD $352 million). Company President Bruno Cercley stated in a press release that the group intends to break even within two years. It also does not plan to close any of its facilities, including those in France, Spain, Italy and the United States.
The Rossignol business has been troubled since Quiksilver first acquired it in 2005 for $560.8 million. Quiksilver jettisoned Rossignol in October 2008 for a mere EUR 40 million (USD $52 million) to its new owners, Chartreusse and Mont Blanc. Of the brands, it is Dynastar that is perhaps in the most difficulty, with a reported 250,000 pairs of unsold skis at the end of the 2008 season, all of which were destroyed. Production of Dynastar skis will be cut back from 800,000 to 650,000 skis for the 2009 season. The board of directors of the Rossignol Group indicated earlier in April that it would provide Dynastar with a cash investment of EUR 39 million (USD $51 million). Insiders have told us that the company was losing over $5 million a month — hit by a combination of the worsening credit market, a fluctuating global market and overproduction.
SNEWS® View: Following the graph and stories on Rossignol, this is quite a tale of financial ups and downs. Always a darling brand of the French, Rossignol nearly went belly-up in the mid-1950s before Laurent Boix-Vives strode in and took the company into the stratosphere. Rumor has it the president of France would consult with Boix-Vives in the ’70s, such was the strength of the company. But, in the 1990s, the company stumbled badly, first with inline skating and then snowboarding, and by March 2005, when it was sold to Quiksilver, it was in debt to the tune of $156 million. Quiksilver did little to help the struggling brand, and basically handed a shell of what the company once was off to its new owners, Chartreusse and Mont Blanc for a song. If the new management hopes to recapture some of the glory from the days of Boix-Vives, 30 percent layoffs and $51 million poured into Dynastar to keep the brand liquid is not exactly a stellar beginning. This one deserves watching very closely.