Polaris buys Klim

Discussion in 'Equipment' started by hyperboarder, Dec 6, 2012.

  1. burmbuster

    burmbuster Long timer

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    That's my hope as well. Maybe they will develope a line for us warm weather riders. Something that vents well in 90* humid climates.
    #61
  2. zenjen

    zenjen Go Outside

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    #62
  3. Patch

    Patch Been here awhile

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    Not to quibble... but I'm going to. TNF would be a faint memory if not for acquisition by and investments from venture capital groups that infused the 'brand' with cash while concentrating the efforts of management to deliver a viable long-term strategy.

    Good products are one thing - but a 'parent' company can often help weather the ups and downs internally without interrupting the overall development & production of the brand. Sure Polaris is going to need their cut, but they bought into what they feel (and others may or may not agree with) is a sound brand and product line. Doubtful they will junk up a newly acquired income stream. Keeping the CEO is step 1... and they did. If they had other plans... they would have scrapped the whole operation right away and re-sold it bit by bit, squeezing every drop of cash out of it right away.

    I don't see how a parent company or a new ownership structure would affect ones consideration of Klim gear. In my opinion, it should serve to strengthen it.
    #63
  4. Dan Alexander

    Dan Alexander Ride Far - Ride Fast

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    +1, now that makes sense, not just a knee jerk reaction but reasoned logic.
    #64
  5. Snarky

    Snarky Vodka Infused.

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    I used to have a 2003 Polaris Predator 500, that thing was a beast. Borderline lethal. It was sporty, fast, simple and reliable.

    My friend has a Victory, it seems better made, with more American parts than the Harleys. I don't necessarily see Polaris buying Klim as a bad thing, perhaps they'll move production back into the US. Still, there are quite a few other makers of quality gear if Klim diminishes.

    I would actually like to see Polaris buy Motus, and perhaps move them to something below an estimated $30,000+ msrp. Though GE capital seems to be investing in them.
    #65
  6. Xeraux

    Xeraux Archvillain

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    Doubtful. TNF was pretty innovative at the time. I still have the original TNF jacket that they put Gore-Tex™ in. It's absolutely bomb-proof. It really is something you would consider climbing a mountain in. It may not have been as big or as popular as it is now, but it's my opinion, it'd still be around. TNF is little more than a fashion brand, now.

    Oh, trust me, they'll leave Klim alone for a little while, then they'll start creeping in. They'll start insisting they use another similar weight material for the non-abrasive areas because they can get it a little less expensively and it won't compromise the jacket in any way. They'll start using things like Hippora in a different line because it's less expensive than Gore-Tex™. They'll introduce that less expensive line to make the brand more "accessible" to other riders. Then they'll look at the sales of the Adventure Rally and decide that if they convert the production lines that are currently making the Adventure Rally over to another product, they can increase sales by some percentage. I've been present in meetings like this.

    Can a larger company help a smaller one by taking it over, sure. Is it always good for the smaller company in the long run? Nope. The parent company is going to do what's best for the bottom line of the parent company and as long as that coincides with Klim's vision, they won't change it. When those ideas start to diverge, Klim's toast.
    #66
  7. gbmaz

    gbmaz Power Newb

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    Unfortunately being innovative is meaningless if the management is irresponsible and is looking for a big payout. TNF changed hands several times in the period just before VF bought them, including a brief bankruptcy if I remember correctly. In the late 90's they thought they were god's gift to the outdoors and set annual growth targets in the 20-30% range and then over produced. This lead to fun things like them dumping product in to SAMs Club or Costco one season. The owner of the business I worked for had to deal with TNF product being retailed for just few bucks over our cost because some dill hole in th Bay Area wanted to score big. He had been a TNF dealer since the early 70's and they fucked him.

    I refer to Vanity Fair buying them as "when the adults were in charge again". Now they are a stable company with growing sales who deals fairly with their dealers. They still make cutting edge product, the production of which I subsidized by soccer mom's and frat boys buying endless numbers of over priced Denali Jackets.

    If you do your research on most outdoor brands, even most of the hard core enthusiast brands you will find that they are now owned by a larger parent company. Some have let their soul, but smart buyers don't fuck with the goose thy lays the golden egg.
    #67
  8. Terence FFM

    Terence FFM prof. cat-herder

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    What angers me the most about this post is that I 100% agree with it. :cry I hope that we are both wrong.
    #68
  9. fullmonte

    fullmonte Reformed Kneedragger

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    The best way to be wrong is to buy a controlling interest in Polaris stock.:deal Xeraux nailed it. I wonder if there are any Polaris execs who are inmates here.
    #69
  10. xr400r

    xr400r Long timer

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    so let's say good bye to klim. But I wanna know who's next to take klim's place in the market?
    #70
  11. SnowMule

    SnowMule [angry moth noises]

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    Ever heard of "Motorfist"?
    #71
  12. Dan Alexander

    Dan Alexander Ride Far - Ride Fast

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    So everyone is already tossing the last shovel full of earth on the casket of Klim quality gear, writing them off on pure specualtion and prejudice. Does that crystal ball show you winning Power Ball #'s too ... didn't think so :rolleyes
    #72
  13. eddyturn

    eddyturn Wannabe

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    Dan, you cannot post enough. I love seeing your avatar all over the forum.

    Hope Klim keeps putting out the good stuff.
    #73
  14. Dan Alexander

    Dan Alexander Ride Far - Ride Fast

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    :lol3

    Thanks ... wish I could see more of whoever it is wearing those sexy panties. I could joke and say it's my wife but nobody would believe me :cry
    #74
  15. GB

    GB . Administrator

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    :nod How many of the naysayer armchair CEO's in this thread actually run a company the size of Klim, or know the details for the purchase agreement with Polaris, where the parent company will be looking for them to cut corners and go with cheaper materials and still charge a premium for their products to pad the bottom line?

    If you look at the Klim line, they have riding jackets from $300 to $1400.. Price wise, they are competitive with a whole range of riding apparel companies. There's an outfit for every budget.

    FOR ME, it is less expensive to buy quality gear that fits my needs and buy it once. I wear an Aerostich Roadcrafter 1 piece suit to commute to work every day. The suit is worn day in day out.. and it holds up very well to daily use, with very little if any signs of wear. I did try an outfit from another riding apparel vendor who shall remain nameless, and, after a few weeks, the black cordura started to fade, the inner liner started to go fuzzy, the neck area was pilly... You get what you pay and it's always cheaper to buy a quality item the first time. I am highly impressed with the build quality, attention to detail and design features of the Badlands Pro jacket. Dear Santa... :deal

    I see good things coming from this, and I'm not even an armchair CEO. :lol3
    #75
  16. SnowMule

    SnowMule [angry moth noises]

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    I don't even have an armchair. :cry
    #76
  17. mario33

    mario33 Howling around...

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    Been working in M&As for a longer while and in finance... I have seen NO deals that left smaller companies fairly independent in the long run. It may stay OK for 5 years (if business is good overall), but not for 10 years... And American companies are particularly impatient :evil

    Well, businesses need to make money. And lots of us here clearly think that investors give their monies to play good daddy. ROI is the king in the long run, otherwise your own shareholders get you out of CEO seat or others buy you out.
    #77
  18. Lonestar JR

    Lonestar JR n00b

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    a couple of things.........

    Margin

    from what I understand Klim's is right in the middle w/some higher & some lower. Margin itself comes from the formula that each company comes up with to stay profitable. Nobody wants to work for free. It includes R&D, insurance, payroll, bldg/whse costs, advertising, etc. In a perfect world a company would sell everything they produced at full price and everyone who purchased from that company paid their bills on time. As we all know there is no such thing as a perfect world. A company has people that purchased but don't pay their bills/go out of business. They have inventory surplus that they have to discount at the end of the model run, a bad economy & other unforseen issues. All of that drops the margin levels the company makes - so a company has to have a higher beginning margin to hopefully end up somewhere around where they really have to be.

    A dealer direct company like Klim for example designs, builds & sells a product to a dealer/online retailer, say they feel they need to double their money to pay for everything and put some money in the bank. Then they sell it to a dealer who needs to make say 40% to cover their overhead - there is only 2 markups. But say a chain mfg builds a chain for $21 - they double their money and a distributor like Parts U/TR/WPS buys it for $42 - they double their money and sell it to a dealer for $84 - the dealer needs 40% so the retail cost ends up being $140 to the consumer. There are 3 markups when someting goes thru a distributor.

    All the fuss about things being built overseas

    That is where all of the machines/technology/training is. It is not here in the US. We don't have a labor force trained to build these types of products. With the costs of building machines here & the cost of American labor the retail price of riding gear would be.......... just think about it for a sec.

    a helmet mold overseas costs about $250,000 to make - each model has at least 2 different sized shells to cover all of the sizes- some have 3-4. that means a half million to 3 qrtrs of a million just for the molds. Then you have the raw materials, labor, boxes, mfg plant, etc. on top of that. You have to sell a LOT of helmets just to break even.
    #78
  19. wolfmanluggage

    wolfmanluggage Been here awhile

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    AHHH you get it. Well spoken.
    The challenges of Made in USA.
    I would not make Wolfman any other place.
    Woof
    e
    #79
  20. tattoogunman

    tattoogunman Been here awhile

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    A lot of this noise reminds me of my old Victory days. When Polaris came out and said they were going to be making a cruiser, people hooted and hollered "What? The ATV snowmobile guys are making a cruiser? Hahahahahahaha" Yep, and look who got the last laugh on that one - Victory took off.

    Same thing with Klim, I don't see it as being a bad thing as I always found Polaris to be a stand up company. Their stuff may be more than I can spend, but I don't see this hurting them in the long run :D
    #80