As the COVID-19 pandemic drags on, companies still struggle to cope with shifting markets and consumer habits. For evidence, look no further than Bell Helmets.
In a U.S. Securities and Exchange Commission (SEC) filing submitted on March 31, 2023, Bell’s parent company Vista Outdoor Action Sports stated that it will implement a “$50 million cost reduction and earnings improvement program, which includes office closures, spending cuts... and headcount reductions across [its] brands and corporate teams.”
As a part of the cost-saving effort, the company will conduct significant staff layoffs, with heavy losses expected to the marketing, brand, and creative departments. Vista Outdoor will also shut down the Bell and Giro Helmets Headquarters in Scott’s Valley, California, on September 1, 2023, before consolidating the remaining employees under one roof at the Fox Headquarters in Irvine, California.
“We are accelerating the merger between Bell, Blackburn, Copilot, Fox, Giro, Krash, and Raskullz,” Vista Outdoor Action Sports president Jeff McGuane told Bicycle Retailer and Industry News. “Plans are underway to unite our teams at the current Fox offices, which will soon be transformed into a revamped Innovation Center that unites our teams under one roof while honoring each brand’s culture and ethos, which are unique, valued, and untouchable.
The move follows slumping sales in key areas for Vista Outdoor. When Fiscal Year 2023 Q3 ended on December 25, 2022, the corporation recorded a sales decrease of $40 million. While revenue rose by 34 percent ($132M) compared to the same period the previous year, gross profit still declined 15 percent, operating expenses rose by 16 percent, and earnings before interest and taxes (EBIT) fell by 39 percent. The poor performance also impacted shareholders, with Fully Diluted Earnings per Share (EPS) plummeting by 44 percent.
In the SEC filing, Vista Outdoors also cites “elevated retail inventory levels, rising interest rates, and inflation” as contributing factors. Despite the bad news, McGuane hoped to reassure customers by stating that the merger wouldn’t impact the separate brand identities under Vista Outdoor’s umbrella.
“Fox will be Fox, Bell will be Bell, and Giro will be Giro,” McGuane concluded.
Of course, only time will tell whether the corporation’s plans pay off in the end.
