Dorel Sports Sells Sugoi and Sombrio to Louis Garneau
MONTRÉAL, Canada – Dorel Industries has sold the Sugoi and Sombrio brands to Louis Garneau Sports. The company is divesting its performance apparel line of business to focus on its core strategic businesses of bikes, parts and accessories and electric ride-ons.
“Despite the strong brands and products in Sugoi and Sombrio, apparel is not a strategic priority and has been a drain on Dorel’s financials,” stated Dorel President and CEO, Martin Schwartz. “It is in the best interests of our shareholders for us to focus on our core businesses. Sugoi and Sombrio are a perfect fit for Louis Garneau Sports Inc. They specialise in cycling apparel and I am confident both brands will reinforce their excellent product offerings to retailers worldwide.”
Launch at Eurobike
“This acquisition will enable Garneau Group to rapidly increase its sales and become a world leader in cycling apparel,” declares the President and Founder of LGS, Louis Garneau. “We will proceed with the official launch at Eurobike next July. We will present our 3 brands and put forth the Canadian spirit and the strength of our innovations. The take-over will reinforce our positioning on the West Coast of both Canada and the USA and provide strategic opportunities for growth in Western Europe and Asia. Sugoi is currently present in over 3,000 retailers and has always been based on innovation and quality, just like Sombrio.
Next generation at Garneau
With the arrival of the second generation of Garneau’s in the company, LGS is undergoing a transformation and regeneration of its business model. William, 28, is General Manager of the company while Edouard, 25, is Sales Director. The youngest, Victoria, 21, has just finished her studies in Fashion Design and will soon be joining her brothers full-time in the family company.
As a result of the sale of the performance apparel line of business, Dorel expects to record an estimated amount of USD 11 million (9.5 million euros) of restructuring and other costs during the second quarter ending June 30, 2018, mainly related to non-cash charges associated with the write-down of trademarks and non-cash inventory markdowns.
Dorel acquired Sugoi Performance Apparel in February of 2008 with the purchase of Cannondale Bicycle Corp. from Pegasus Capital Advisors. Dorel later purchased Sombrio in January of 2014. Sugoi, founded in 1987 by two Vancouver entrepreneurs, specializes in cycling, triathlon and running apparel. It is also home to Sombrio, a mountain bike apparel brand well-known among fans of this sport. Sombrio has been in existence for over 15 years, with designs inspired by Vancouver’s North Shore.