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Story of idiots: Mavic, one of the best rims manufacturers is in bankrupcy state
  • Last December, the company, which is based in Annecy in the French Alps, entered a process called conciliation which, under French insolvency law(link is external), seeks to arrive at an agreement between a business in difficulties and its creditors.

    In February this year its management was put in the hands of By Saving, a French firm specialising in turning around struggling businesses.

    Recently, however, it emerged that the company had this week entered a process called redressement judiciaire, under which a court appoints a receiver who, working with management, seeks to maximise returns to creditors.

    Six months have been granted for the process, which is the final one available to try and rescue a failing company, to be completed.

    The options, at the end of that, are stark. One is to repay the debts and agree a business plan going forward – difficult at the best of times, let alone when the coronavirus pandemic is set cause a global economic crisis. Otherwise, if no buyer for the business can be found, whatever assets it has will be liquidated.

    Founded in 1889, the brand was bought in 2005 by the Finland-based Amer Sports(link is external), whose other businesses include the winter sports brands Atomic and Salomon – the latter becoming Mavic’s direct parent company

    Amer Sports, which still owns Enve, decided to sell Mavic – which employees 200 people in France and a further 50 elsewhere – following a strategic review of the business initiated in 2018.

    In March last year it was announced that agreement had been reached to sell the business to Los Angeles-based private equity firm Regent LP, which confirmed (link is external)completion of the transaction in July.

    Not so long ago, you couldn’t miss the Mavic brand and its distinctive black on yellow logo. The Annecy-based company, which had pioneered technology such as aluminium rims as well as disc wheels.

    For Mavic, whose core business remains wheels – it also sells clothing, footwear and other equipment and components – there was the double-punch of many bike brands bringing wheels in-house, often by launching their own sub-brands, and of increased competition in the wheel market generally.

    The first of those caused sales in the crucial OEM segment to plummet, while the second saw the arrival of smaller, more nimble competitors, that were quicker to understand the opportunities the internet provided in being able to build their brands and engage consumers.

    Amer Sports did not view Mavic as one of its core brands, perhaps resulting in less investment being made in the business, and less attention being paid to its development by group management.

    Sales are at free-fall – from €130 million a year in 2015 to barely half of that, €70 million last year, itself a 20.5 per cent decline on 2018’s €88 million. On that 2019 turnover of €70 million, the business made a net loss of €12.8 million.

    New owner did not invest anything in compay and can be waiting for it to collapse to sell the brands to Chinese firms.