Industry News:

Salomon To Abandon U.S. Inline Skate Market in 2006

French Company Plans to Reevaluate After a Year; Skate Merchants Hope to Find New Channels

By Robert "Just the Factoids" Burnson

Citing declining sales, Salomon has decided to abandon the U.S. inline skate market and focus its efforts in Europe, Asia and Canada.

The decision means that Salomon skates, the third most popular brand in the world, will be absent from retail stores in the United States in 2006.

It is not clear whether U.S. online merchants will be allowed to carry the company's skates, although they say they hope to.

Salomon officials said market conditions forced them out of the U.S. market.

"While some markets -- notably those in Europe and Asia continue to flourish -- the (inline) market in the U.S. has declined substantially for several years in volume, mix, profitability and distribution," said Michael Adams, a senior Salomon vice-president.

"Salomon has decided that the outlook for the U.S. market -- while stabilizing -- is not improving to a point which justifies further investment."

He said the company will reevaluate the U.S. market each year and return if and when conditions improve.

Will Salomon Return?

"For Salomon to return, there would need to be a resurgence at the mid- to high-end price points," said Michael Chiasson, Salomon North America's inline and Nordic product manager.

Along with Roces, Salomon positions itself as a premium brand, devoted to quality and innovation.

"Until there is a resurgence in demand and distribution for these types of skates, we feel that our current (strategy) addresses today's retail dynamic," Chiasson said.

U.S.-based online skate merchants say they hope to find ways to continue to carry Salomon skates next year.

"I believe we are their largest dealer, so hopefully they will allow us to work something out with them," said Stan Chaves, owner of the Inline Warehouse.

Lee Cole of said, "If push comes to shove, I'll import directly from France."

Weak Market or Weak Marketing?

Cole -- who, along with Chaves, has been reporting brisk skate sales this year -- said weak marketing, not demand, is what hurt Salomon.

"Their skates are great," he said. "But convincing the American public that they are worth buying takes considerably more money than Salomon is willing to allocate."

All skate makers have cut back on U.S. advertising in recent years as the market declined.

But Salomon went further than most. It also stopped sponsoring inline skating events, which is another way skate companies promote their brands.

Salomon's retreat from the U.S. market comes as the French-based company is being sold from one sports conglomerate to another: Adidas to Amer Sports (for $628.4 million).

The sale was announced after Salomon recorded several losing quarters. The company blamed the red ink on weak ski and skate sales.

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(posted on July 5, 2005)





Copyright © 2005 by Robert Burnson



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