You are in:
Amer Sports
Amer Sports is the number one sports equipment company in the world, and it's a company built on a number of key brands. While it's currently number one, there is no sign that they are resting on their laurels, as Michael White, Managing Director, Amer Sports UK explains; there is room for growth even when you're at the top.
SGB: Tell us about Amer Sports...
Michael White: Amer is the sum total of the constituent parts of lots of brands. We have five international brands which are Wilson, Salomon, Precor, Suunto and Atomic. And we have become the number one brand in the world by acquiring, integrating and growing each of those five brands. It's not as simple as that, obviously: our first step was to find brands that had heritage and credibility in the areas they operate in. We also looked to make sure we have innovative, technically advanced products and we can bring these to the market quickly as we have a great sales and distribution structure internationally. And then we also pride ourselves on customer service - we make sure our customers are looked after with the products they get, the state at which they get the products and for reordering.
SGB: Which part of the company is the largest by revenue?
MW: Salomon is the largest in financial terms, then it's quite well balanced across the other brands - Wilson, Precor and Atomic. Suunto is the company that is smaller but is growing for us. You would actually expect it to be smaller to because of the nature of the product, it's wrist-top computers.
So Salomon is the top performer worldwide for us. In the UK the best performers are Salomon, Wilson and Precor. Atomic is not in that list for the obvious reason that it is a ski and snowboard brand which is a smaller market in the UK than other places. Salomon does have the winter sports element but is offset by the clothing and sportswear.
SGB: Where does Mavic fit in?
MW: Cycling is a huge market and one of the few in the sports industry that is growing so it is an interesting area to be in. Mavic is a very specialized brand because it's basically about wheels and wheel hubs. Mavic is exceptionally well thought of in the field. If you watch the Tour de France you will see the Mavic car, or the World Cycling Championships - Mavic gear is everywhere at the top of the sport.
SGB: How is the company set up?
MW: In terms of how we report to the city we have just restructured. We have three segments which are Winter and Outdoor, Ball Sports, and Fitness.
Fitness is the easiest to summarise as we have one fitness brand - Precor. Ball sports is simple as that is Wilson which comprises of golf, racket sports and team sports which are American football, baseball, basketball and so on. Under Winter and Outdoor we have grouped together the brands of Salomon, Atomic, Suunto and Arc'teryx. there is a value in putting those brands together as they are targeting a similar market and often a similar end user so is there is some sense and synergy to addressing that as a sector.
SGB: How do you assess how to invest in each brand and how to further develop them?
MW: Other companies seem to have thought that if you take a company over, you then stamp your new identity on it, or they think 'we need to leave this company as it is as that is what made it successful'. Amer uses a combination of the two - if you were to speak to someone working in the Salomon brand they would very much have a culture specific to that brand. To put it into an Amer Sports context, they would have an Amer Sports culture. And for me if I have a meeting in the UK it's very much an Amer Sports meeting. At the same time if I'm with the Atomic guys there will be an Atomic culture going on. This is very interesting and we allow both to coexist, so we still have a headquarters for each of those brands.
We have a classic matrix structure where you have people with regional responsibilities such as myself looking after the UK or the European or the MEA manager. You will also have a person looking after each of the sectors; Winter and Outdoor, Fitness and Ball Sports.
SGB: Where is the future growth for Salomon?
MW: Primarily soft goods, which is clothing and footwear. The reason for this is if you look at the hard goods area the market is fairly flat, hard goods being hardware, equipment, things like snowboards and ski boots. Secondly Salomon and Atomic have massive market shares and are very strong at the hard goods areas they are already operating in, so the potential for growth is actually mathematically limited. With soft goods we are rapidly becoming a major player in apparel with the Salomon brand, this is huge growth area for us.
SGB: Where would Wilson grow?
MW: Golf is the biggest market in terms of the external market. We have been in golf since 1914. The area where we are going is racket sports. Certainly if you ask the consumer about Wilson in the UK they will say tennis rackets. We have been used by the top tennis players for as long as I can remember. At the present time we have Federer, Djokovic in the men's side. On the ladies we have Venus and Serena Williams, and Lindsay Davenport. If you go back, Sampras and Connors played with Wilson, Chrissy Everett, Billy Jean King. In tennis rackets and squash we are the clear market leader.
SGB: Is it tough to stay at the top?
MW: The reason we've managed to do that to date is that we keep bringing out fantastic products. We have just bought out the K Factor racket, Roger Federer was first to use it last year, winning three out of the four Grand Slam titles. When someone is that good it is a great compliment to have him say that with the new racket he was making a lot less unforced errors than he did with his previous, very good racket; then you know you are on to something. I think the difference between us and our competitors is that we continue to bring out new rackets every year and take the bar higher each time. Our market share reflects this year on year investment in the technology and marketing.
Apparel is also an interesting growth area for Wilson. We have just started to develop in that area.
SGB: You mentioned Suunto was a smaller international brand - where does its growth lie?
MW: Top athletes are using either Suunto or Polar in their training. The challenge to market Suunto is to know where to go first. We have so many good products for so many different areas and the products are very technological so it takes a while to explain why the product is so good, and to go to all the individual specialized outlets that cater for each of the sports we offer products for. With a really good running product we have to go to the running and triathlon shops, which are generally small independents so you have to work shop by shop to explain to them personally and show them the benefits and get stock in for them to start selling. Think of that then factor in that Suunto has a product for rowing, cycling, orienteering, mountaineering, rock climbing, skiing and golf! We are growing at a fast rate and with more people we could grow quicker but that would be at the expense of profitable growth. The area we think Suunto is going to work well in is training; we have wrist-top computers for the top athletes that will monitor every aspect of training but we also do ones for the amateur which will tell you things like whether you should have a rest day or work out at specific intensity. There hasn't been anything else on the market like this, we're the first.
SGB:What about Atomic?
MW: Atomic is ski boots, we are fantastically strong in Alpine skiing. Last year, in the World Cup, if you added together the second-, third- and fourth-placed brands it still didn't come to amount of points Atomic had in first place. The Atomic dominates Alpine, downhill, slalom... The area we really punched below our weight in historically was boots, but we've now got them right in the last two years and that is growing quickly. The other area of growth is free-ride skis or mountain skis. If you look at a brand that has been particularly strong in one area it's easy for people to think we are good at just Alpine but we make good off-piste or free-ride skis which we will continue developing.
Atomic is such a strong brand and if anything, I feel we do not exploit as well as we could.
SGB: Precor is another strong brand. Where's the growth there? It's already ubiquitous in health clubs.
MW: We have great equipment and the upside in the UK is that there are places where we are not present. Precor is most famous for the Optical Cross Trainer, which is very well known. Also we have a fantastic piece of equipment called the AMT, which rather than you fitting yourself to match the movement of the machine, the machine matches your movement. AMT stands for Adaptive Motion Trainer. So if you want to climb, the machine will follow you or run forward with small steps or stride forward with big steps - it will follow. We are having fantastic success with that.
Our other trump card is ClubCom, which is our media brand which allows us, through our media channel, to provide whatever the health club would like their customers to see, so it can be a mix of sport, music, training, advertising, whatever. Not all companies can offer that.
SGB: What are you trying to do in the UK in terms of brand perception?
MW: We are trying to go from a company which has lots of brands to a company that is called Amer Sports. Don't get me wrong, I'm not bothered whether the consumer knows Amer Sports - but I would like people in the sports industry and people in the city, investors and journalists, media, to know. I would like those people to know who Amer Sports is, and to know we are the number one sports equipment company in the world. If they actually want to know what is going on in the sports equipment market why not give us a call and ask us.
We've launched the 'UK Sports Equipment Report' which is the first report of it's kind that looks at the market Internationally and specifically in the UK and pinpoints the areas that are big, the areas that are growing and the participation levels across these sports, and also speaks about some of the innovative things that are going on from a product and service point of view in those areas.
We're trying to develop each of the brands and to develop this overall concept of being an essential part of the sports equipment industry in the UK.
SGB: How does Amer Sports support independent retailers in the UK?
MW: At Amer Sports we believe strongly in providing a service to support the independent retailer. This includes providing premium products for better players, personally customised products, regular staff training, opportunities to try our products, coaches who generate direct business for our retailers, a dedicated sales representative AND customer service representative and a local warehouse specifically servicing the UK in many sports.
Amer Sports brands are authentic brands with heritage; we are passionate about sport and therefore understand what the end user is looking for. Giving the retailer the right technologically-advanced product that helps the consumer perform better or derive more enjoyment from their sport is therefore at the heart of what we do.
SGB: Across the brands, is there significant investment in retail merchandise?
MW: Point-of-sale material is a key service that we provide, enabling our retailers to communicate product benefits to the consumer as well as the excitement and passion of using products similar to those used by some of the world's top athletes.
