When conglomerate Newell purchased Pure Fishing from fellow conglomerate Jarden earlier this year, Newell officials were quick to say that the acquisition wouldn't have any impact on Pure Fishing and their myriad of consumer fishing brands.
It didn't take long for that story to get revised, although with considerably less fanfare than the original deal.
Newell has dismissed Pure Fishing's entire 30-person marketing staff headquartered in Columbia, South Carolina. With the cuts also including experts in everything from baits to fishing lines, it looks like the company's R&D efforts are being slashed as well.
Other cost-slashing measures apparently include deep cuts in the company's professional angler roster (that's underway ) and it's no secret Newell doesn't plan to renew many – if any- sponsorship deals when they expire. That includes, we're told, the B.A.S.S. agreement set to expire next year.
As one fishing industry executive told me, "Be glad you're not a professional angler looking for sponsors, because that water is getting skinnier by the minute."
Sources tell us Newell's plans include slashing as much as $500 million- from Jarden's overall operating costs. If that's not doable as the company roster stands now, Newell will likely start disposing of chunks of Jarden properties.
The prospect of seeing brands like Berkley, Stren, Trilene, Abu Garcia, Mitchell and Gulp! Baits coming available has Pure Fishing's largest competitors salivating at the prospects. Additionally, we're hearing other companies looking to either break into the outdoor recreation space or diversify their existing portfolios might be looking into the opportunity as well. And don't count out a knowledgeable group of investors who see a business opportunity (ala the B.A.S.S. acquisition from ESPN) making a play should a breakup be in the cards.
It's quite a change from 2007 when Pure Fishing was acquired from the Bedell-family by Jarden Corporation. Then, Jarden Chairman and CEO Martin E. Franklin described the acquisition as "an excellent fit for Jarden and our Outdoor Solutions segment." He went on to describe a vision for cross-selling, channel expansion and geographical expansion opportunities with Pure Fishing and the company's Coleman and Campingaz brands.
Long story short, none of that happened. And in December of 2015, it was announced that Jarden's products, including Pure Fishing, would become part of Newell Rubbermaid Inc. in a $15.4 billion dollar deal that brought together a conglomeration of brands ranging from Mr. Coffee and Sharpie markers to Rawlings baseball gloves, Coleman camping gear and Pure Fishing.
We're still months away from ICAST- the world's largest trade show for the recreational fishing industry, but it's apparent there may be some big changes in store for attendees accustomed to Pure Fishing's usual massive presence on the tradeshow floor.
While we're on the subject of business changes, the Associated Press is reporting that regulators are putting the brakes on the pace of Bass Pro Shops acquisition of Cabela's (NYSE: CAB).
It seems the regulators want time to more examine at the $5.5 billion deal. Since it's well over the $78 million dollar benchmark the FTC uses for scrutiny, it will likely include a store-by-store, city-by-city look at markets where BPS/Cabela's both operate.
In some cities, there are stores in very close proximity of each other. In both Bristol, Virginia and Chattanooga, Tennessee, for example, new or nearly-new stores of both brands are located in sight of each other. Even if the deal closes, it's not likely both stores would remain open any longer than absolutely necessary.
And it is a big deal. When combined (if combined as-is), the result would be a 182-store chain with 40,000 employees. Great if you're looking for economies of scale, pricing leverage over vendors as an owner (despite the fact BPS is paying premium for the Cabela's stock that's a number the company hasn't approached in the past 30 months).
But the Federal Trade Commission is concerned about such a deal unfairly impacting other retailers. In May of this year, the FTC took a "closer look" at the Family Dollar/Dollar Tree deal. As a result, 330 stores had to be sold before the FTC approved.
I'm hearing that should the deal be delayed because of overlap concerns, there's a a closure strategy ready, but no one's talking in either Sidney, Nebraska or Springfield, Missouri – at least not for attribution.
As always, we'll keep you posted.
--Jim Shepherd
