All Hail New Masters @ Asnes

[Manney]

So Asnes was sold. Not unusual. Often happens to family businesses after 2-3 generations. That’s the point where the passion for whatever product or services the founder created gets eclipsed by the value of the brand or the innate value of the company (in other words, infrastructure or IP). If a sell out doesn’t happen, then a company goes public. Either way, a board is usually put in charge.

Before anyone gets huffy, this is a function of human nature. Why work and take risk when you can cash out? Also, companies at a certain point encounter frictions of scale, competition etc. Things become hard at that point. Really hard.

Ok… so let’s get down to it. Who bought Asnes? Short answer: A company called Active Brands AS. LOL. Not making this up.

Active brands has been around for 13 years… sort of. It was bought out in 2007 by FSN Capital Partners. That is a Private Equity firm founded in Norway by Frode Strand-Nielsen, a Harvard Business School Grad (MBA) and Norwegian businessman out of Oslo. It’s the only company he’s founded and employs 18 people. Typical profile for a PE firm.

So Active Brands now appears to be a shell of sorts whose last round of funding was in March 2022.

Active Brands owns Kari Traa (women sportswear), Bula (accessories), Vossatassar (kids wear), Biorn Dahlie (cross country skiwear), Sweet Protection ( ski helmets, protection and apparel). Now Asnes, which is its only “hardware” piece.

Active Brands’ turnover was approximately NOK 650 million (~$60m US) in 2015 and the number of employees at that time was 165, situated in Oslo, Voss, Gothenburg, Trysil, Copenhagen, Denverand Shanghai. So that 165 probably encompassed all of the employees of its brands plus a few corporate types. The Shanghai part was likely where the contract manufacturing occurred. Active Brands is now showing a staff of 210.

The CEO of Active Brands is a Frenchman named Christophe Merkel. He was an exec at Nike (VP Nike Japan, then President of Nike France, Poland, Turkey, Benelux … 2011 to 2021). Prior to that, L’Oreal (cosmetics) and Danone (yogurt). He has been the CEO of Active Brands since March 2021.

Merkel is a business guy by the sounds of it. MBA from HEC (a French Ivy League business school) and an undergrad in Finance. Lives in Poland (Active Brands offices are in Oslo). So manages the portfolio of largely Nordic conglomerate from afar. More fund manager than hands on approach maybe.

Most of what’s been seen from Merkel in interviews has focused on products oriented to women etc. Explains Kari Traa, Bula, Dahlie whose focuses are on female buyers. Interestingly, Merkel has spoken about luxury focus, upscale, boutique etc. Not surprising, as this is the lingo of sportswear and cosmetics industries.

So what does this mean? Let’s assume that entrenched management were part of the buy out. It would almost have to be given that Asnes is the only real hardware piece. It’s not like Active Brands or FSN Capital Partners have any woodworkers on staff. LOL.

The real issues going forward will likely be market focus. Not an expert on ski trends but XCD/Tele doesn’t seem to be the hot commodity in skiing. It’s always been a fringe. So will Asnes be allowed to access capital to dominate that fringe? Unlikely, given that lots of players (some with deep pockets) operate in that space too.

This is Private Equity. More money goes into than goes out. It’s about generating and dispersing money to the fund and its members. That’s how equity is served. So any expansion, refocus etc. will be done purely on business terms, market research etc. This is very much in line with the profiles of the CEOs of FSN and Active Brands… Ivy League business types. Their background is generating capital, not pursuing ski dreams.

You can bet yer ass on seeing more cross marketing… anyone who has been in a sports store where Kari Traa is sold will have seen Dahlie and maybe Sweet Protection too. Those companies are very, very classic and skate oriented. More Lululemon than Land’s End. So my guess is that Asnes might get into this end of the sport too. DH? Idk. BIG players in that market with decades of experience and massive market penetration… getting into that end of the ski business would require a large capital investment in a contested space. Sweet protection plays in that space but isn’t a major player.

So there you have it.

Thanks to @Nitram Tocrut for highlighting this change. Asnes was, of course, a family business. Its sale didn’t make big headlines… no share holders to notify etc. So all very quietly done until the ink was dry on the contracts. Then the new head office address was hung up on the Asnes site.

[Musk Ox]

To clarify, Active Brands have owned Åsnes for a good few years now.

It's probably worth pointing out also that Åsnes haven't been family-owned for about 25 years, even if a member of the Åsnes family still works for the company (or did until recently, I'm assuming he still does).

I'm assuming also that some of the new Åsnes apparel and base layers and gaiters and stuff has something to do with the other Active Brands companies.

[Manney]

Sounds about right. Market analysis of Active brands

http://cbsfinancecomp.dk/wp-content/upl ... ersion.pdf

Tons of data in the market analysis document.

[mca80]

So the "new masters" have been there 13 years? Hardly new.

[Manney]

Nitram raised a point about a sale. Nothing written on Asnes structure, management, ownership on the forum. Now there is…

No recent change in ownership… just a very recent change in how that ownership is portrayed on the Asnes site. The big thing in my mind is that there’s a new CEO at Active Brands. Came over from Nike, which gives the guy a huge amount of credibility, power, and influence… in addition to an Ivy League education in finance and business.

FSN probably did the head hunting for Merkel, as a parent company would to protect their controlling financial stake. So Merkel is FSN’s guy, clearly not Asnes’ guy (subsidiaries aren’t usually put in charge of hiring higher level CEOs).

Merkel is entering his second year as CEO of Active Brands. This is normally when you start to see more executive influence come to bear on things customers can see at the front end. (Keep in mind that his initial year as CEO was during COVID, so more crisis management than anything else was the order of the day.).

The big question is how Merkel will apply his influence. You’d expect somebody with Nike experience to take more of a centralized approach. Nike didn’t get to be a sporting juggernaut by dispersing power and authority.

But, hey, it’s anyone’s guess. Suspect we’ll see more in 2023/24.

[Manney]

Interesting graphic. Asnes is a very small part of the overall operation. Very little market penetration outside of Norway and Sweden. Limited revenue.

Some might see this as an avenue for growth potential. Others might see it as a corporate distraction… but useful for presenting the group as being more than a fashion player.

The one thing it explains, however, is why Asnes skis might cost more, and be harder to find, in North America.

[riel]

Interesting graphic. Asnes is a very small part of the overall operation. Very little market penetration outside of Norway and Sweden. Limited revenue.

Some might see this as an avenue for growth potential. Others might see it as a corporate distraction… but useful for presenting the group as being more than a fashion player.

The one thing it explains, however, is why Asnes skis might cost more, and be harder to find, in North America.

Backcountry nordic skiing is huge in Scandinavia.

The Asnes brand is used as an opportunity to sell more of their activewear (presumably made by some of their other companies). That's a good reason to keep it alive.

The Mountain Race 48 ski could be an example of the company wanting to branch out to more casual skiers who predominantly ski in the groomed tracks. Those people buy cheaper skis, but they still buy the same jackets, pants, and hats.

The higher-end Asnes skis have a small price premium over Fischer, but it's not very large percentage (in the Scandinavian market), and the ski build quality seems to be better.

The Mountain Race skis are priced very competitively, in-between the beginner skis and the high end skis by the other brands, while offering relatively high end performance.

The Asnes alpine touring skis don't seem to be priced differently than that of other players in the field.

Asnes prices in North America are higher than in Scandinavia, but I don't get the feeling that's their doing.

[Manney]

All good points, @riel. Am reading elsewhere about different thoughts on how to grow the sport. Industry buy-in, profit etc. are part of the picture in a gear reliant sport.

A ski like the MR, though mostly used on groomers, might entice the occasional skier to step out of track. A Gamme or Finmark would even be better despite the lack of a steel edge.

In terms of cross marketing, it opens up a lot. You’re no longer selling beanies, double layer tights, and form fitting soft shells to ppl hoping to survive between when they get out of their car and when their pecker goes numb. You’re able to sell a fuller range of gear. Sure, the fashionable Gucci wear is the mid layer, which you get to model at the chalet or clubhouse. But a company gets to sell a lot more than that. Maybe not expedition gear, but something that better fills a shopping bag.

I agree that Asnes (the ski company) is really just the vehicle to sell athletic wear/winter fashion, largely in Scandinavia (it’s owned by Private Equity… and this is how PE thinks). The trick is finding a way to open ppl’s minds to the skiing possibilities while getting the clothing end of the enterprise to broaden.

Scandinavian skiers are already “there” wrt a broader range of skiing. Americans are untapped because the only things we know at a population level are “classic” and “downhill”. The niches really are niches here, which explains why so many AT products are cross marketed both ways (without actually working well in their niche roles).

It’s a strange thing that makes sense in marketing terms more than in skiing terms.

[Lhartley]

It really blows me away how stuck people are on nordic resort and downhill resort here (Albertal), and a bit of AT. Specifically when hiking is so wildly popular even in the winter. There's so many trails that I'll hike or ski and they are all post holed and whatnot, and thinking why tf aren't these people skiing?!?! Why is this track post holed when it could have easily been skied. It's not because people lack the money for gear, the trailhead is full of nice lookin vehicles. It's not lack of credit or anything like that. It's that backcountry nordic skiing is just so unknown. It really wasn't even on my radar as an AT skier and splitboarder for the last 15 years, I just stumbled on it accidently when trying to figure out how to ski some slopes near my house at the nordic center. The gear just isn't on the shelves and doesn't get the mainstream attention

[Manney]

Yeah exactly. Snowshoeing has better market penetration, which is weird because as much money can be spend on snowshoes as skis (at the lower end of the market anyway).

One of my entry points is the terminus of a classic XC trail. Every year, ppl stop and ask about my gear. They start with the boots… and then move to the skis. They’ve simply never heard of BC gear, much less seen it. When the trail splits 500 yards in, my tracks go places inaccessible to them.

Hours after a snow storm, my tracks might remain on the XC trail network if out for a quick bit of exercise. One or two classic skiers are out struggling (they don’t have time to ask about gear because it’s now survival skiing for them). Snowshoers are out doing what they do… completely unperturbed by the conditions.

BC? Rare breed. Almost never seen. Poorly understood. Nobody sees the “down” either. It’s like a tree falling in the woods…

Ski hills? Jammed. At $60-100 a day (not exactly Vail here LOL)… not counting the dough dropped in the bar and restaurant.