K2 Sports has acquired Line Skis and the Karhu North American Nordic and telemark brands from Trak Sports USA. Terms of the deal were not announced.
The acquisition gives K2 Sports the exclusive distribution rights globally to Line and exclusive North American distribution rights to Karhu Nordic skis. Karhu Finland holds the distribution rights to the Karhu name throughout the rest of the world, barring K2 Sports from distributing Nordic skis outside of the United States and Canada. However, since Karhu Finland does not produce telemark skis, K2 Sports will be able to supply Karhu tele and XCD skis to existing Karhu Finland dealers in Germany, Austria, Switzerland, Sweden, Finland, Norway and Japan.
With the acquisition, Karhu's offices in Burlington, Vt., will shut down over the next two months and all office operations will move to K2 Sports' Vashon, Wash., headquarters.
Tim Petrick, vice president of global sales for K2 Sports, told SNEWS® that a number of key folks were making the move to Vashon from Burlington: Jason Levinthal will direct the Line brand; Charlie Lozner will continue to direct the Karhu brand; Tim Clayton, graphic designer for Line, and Nate Canupp, graphic designer for Karhu, are moving; and Dan Gestwick, process engineer, is not only moving, but, Petrick told us, is already working in China to facilitate the transition. Francois Sylvain will continue on a contract basis designing skis.
Petrick informed us that both the Line and Karhu brands will operate as "different brands with different distribution strategies, and distinct pricing structures backed by a reliable supply chain, management, warranty protections and solid production facilities."
"It is a win-win for everyone involved," added Petrick.
One part of the Karhu line that will not continue, at least for now, is the Karhu Nordic boots, SNS bindings and poles.
"The order book for those was so small we would have had to order up a three-year supply of product just to meet factory minimums," Petrick told SNEWS®. He doesn't rule out a return of Karhu ski boots, but if and when the products return, it will be with the design influences that have driven the new Madshus line of ski boots. That footwear was designed with resources from the company's inline skate engineers who, because of a lagging inline skate market, have been on loan to other K2 divisions to stay busy.
Doug Barbor, president of Trak Sports USA, will continue to produce snowboards for Burton out of his Quebec factory, we were told.
When asked to sum up his feelings over the sale, Lozner told SNEWS®, "Working with Doug has been a very enriching experience, and now getting to go to work with industry veterans like Petrick and (Anthony) De Rocco and (Robert) Marcovitch will be such a valuable learning experience for me."
SNEWS® View: Vermont has to be crying the blues yet again. Over the last two years, the state has lost Rossignol, Dynastar/Lange, Elan, Tubbs Snowshoes and now Line/Karhu. We feel for those who are not moving to Vashon and are now looking for a new line of work, but change for the right reasons is good change indeed, and this is a good thing we believe. We also know the acquisition impacts Peregrine as that company was serving as the warehouse and fulfillment service for Karhu, although again, we're sure Pergrine will be just fine quickly.
As for Line and Karhu, the acquisition by K2 Sports makes perfect sense and bodes well for the brands. The move of Karhu's operations last year to China and the subsequent avalanche of quality control problems nearly crippled the company. While it was on the mend, it was going to be a long road back -- not in terms of popularity with retailers and consumers, but in terms of regaining financial balance. We knew several months ago that Karhu had approached K2 Sports regarding possibly using K2's facilities for production. That, apparently, triggered the discussions that led to this acquisition announcement.
With this deal, K2 Sports further solidifies its position as North America's leading ski manufacturer and grabs a more significant share of the backcountry and tele markets. At the same time, the acquisition bolsters an already strong presence in the twin-tip freeride and park/pipe markets with Line. It's also grabbing some seriously good talent from Karhu -- congrats to the teams on both sides of the negotiating table.
As for Doug Barbor, it's been a long road from the day he launched Karhu's operations in North America in 1976. Now, he gets to focus on making the snowboard factory in Quebec the best one it possibly can be for Burton and he removes a serious level of stress from his life. Insiders told us that while Barbor isn't getting rich over this deal, he's out from under a challenging situation that was threatening to bleed the company dry.