GeneralNewsProduct NewsRacingAfter Acquisition, Changes at Swix and Toko Will Be Behind the Scenes

Avatar Nathaniel HerzAugust 11, 2010

It’s not quite the same as a Nike-Reebok merger, but Wednesday’s acquisition of Toko by Swix Sport will dramatically alter the ski industry’s competitive landscape—at least behind the scenes.

Consumers will see few changes to the products stocked on store shelves. But according to Swix Sport USA President Steve Poulin, his company now controls nearly 75 percent of the worldwide market share for wax and tools, and almost 90 percent in the U.S.

According to Poulin, Swix’s purchase of Toko was calculated: While Swix may dominate in Scandinavia, Toko is the top brand in central Europe.

With Swix making profits over the last two years and looking to grow, the company had two options. It could have spent money on advertising to try to eat into Toko’s market share, or it could simply purchase Toko outright.

“It was a strategic move for us, to try to gain market share quickly,” Poulin said.

Now, with both companies under one roof, Swix will pursue a “two-brand strategy.” That’s a way of saying, in business-speak, that Toko will keep making its own wax and tools. While it sounds inefficient, it’s a common marketing practice. (GMC and Chevy trucks are both made by General Motors, for example, and in the ski world, Salomon and Atomic are owned by Amer Sports.)

“Both brands have different things they offer in their wax formulations, and how they actually perform,” Poulin said. “We think that there’s a distinct customer for…Swix, and there’s a distinct customer that’s looking for the performance of the Toko wax.”

For the time being, wax production will continue in separate locations, although if Swix decides that it’s more efficient to make all its wax in Norway, that could change. Shipping and sourcing are other areas in which Swix may be able to capitalize on economies of scale, Poulin said.

In the U.S., Poulin and Toko Brand Manager Ian Harvey maintained that the impact of the acquisition would be minimal.

Despite Swix’s control over a huge swath of the market, Poulin said that there would be no price increases. And in an e-mail to FasterSkier, Harvey wrote that Toko equipment sponsorships would continue at his discretion. “No changes are planned,” he said.

“Ian will still be calling the shots,” Poulin said. “I am going to be the only one who’s going to be privy to the information of what Ian is doing for strategic thinking on the Toko side.”

Poulin did say that Harvey will likely have more of a presence in the “high-end nordic racing arena,” adding that Toko might start making more appearances at events like national championships or junior nationals, to provide race support.

“We plan on building the Toko brand and increasing [its] market share,” Poulin said, “but carefully enough and strategically enough that we don’t do it at the expense of Swix. It will be a delicate line to draw.”

Poulin wouldn’t reveal the price that Swix paid for Toko, but he did say that the acquisition had been in the works for a while.

“We’ve had our eye on many companies over the past five years,” he said.

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Nathaniel Herz

Nathaniel Herz is a reporter for FasterSkier, who also covers city government for the Anchorage Daily News in Alaska. You can follow him on twitter @nat_herz.

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