About the new owners of
K2...
5/2/07-- In case you were out
skiing (like we were)
and missed the big news: K2 corporation, maker of alpine, telemark
and backcountry skis, along with many other products, and the
new-ish owners of Karhu and Line skis, was acquired last week
by Jarden Corporation. In
a New York Times article, currently under discussion in a thread
on our Telemark Talk Forum, reporter Michael J. de la Merced
was quick to point out that Jarden's founder, current CEO, and
major stockholder Martin E. Franklin, is the son of Roland Franklin,
partner to the Blackbeard of corporate raiders, Sir James Goldsmith.
It is said that the character "Sir Laurence Wildman."
in Oliver Stone's 1987 film Wall Street. is based on Goldsmith.
In a 2004 Business Week profile, author Diane Brady went even
further, opening her piece with the "news" that as
a young man, Martin Franklin's regular tennis partner was Albert
Dunlap. Nicknamed "Chainsaw Al," Dunlap is probably
best known for deconstructing Sunbeam Products, a then-large
American maker of home appliances. Chainsaw Al fired thousands
of workers, while apparently simultaneously cooking Sunbeam's
books with heavily discounted deals given to retailers, for product
to be delivered in the future, but credited to Sunbeam as immediate
sales. Investors saw a company with rapidly decreasing costs
and significantly increasing revenue. Shares of Sunbeam stock
rose from $12 to $53. Four short months later, the bottom had
fallen out of Chainsaw's scam: Sunbeam shares returned to where
they had been before the bloodletting, and eventfully Dunlap
agreed to pay $15 million out of his own pocket to settle an
investor lawsuit.
Okay, so his father worked with
a famous corporate raider, and his old tennis partner was a legendary
downsizer and apparent fraudster. Who cares? The only important
question is this: what kind of CEO is Martin Franklin, the new
man at the helm of K2?
In her Business Week piece author
Brady goes on to note that "Franklin insists he's having
more fun as a CEO than he ever thought possible... (he) seems
more bent on building businesses up than breaking them apart."
Brady continues, "As the youngest of six children in a wealthy
British household, Franklin could have easily slipped into the
role of idle socialite. Instead... while still in his 20s,"
he and a partner bought "11 optical shops for $2.3 million.
The two built the company into a $350 million business. In 1996,
they sold off the core operations for $270 million, more than
$30 million of which went into Franklin's pocket, with two spinoffs
later on. Then came Jarden, where Franklin's strategy has centered
around buying top-tier niche products and injecting them with
a little pizzazz. For example, the company has boosted the appeal
of the humble Ball Jar with such kitschy innovations as jam-making
kits for kids' parties, salsa kits for adults, and Jar Art --
containers that can be decorated in seasonal themes. 'Martin
is a pragmatic, results-oriented operator,' says friend Chip
Kaye," and a Jarden investor.
Still, Franklin is a modern CEO
with a huge stake: he is said to hold some $21 million worth
of Jarden stock, which has notably risen from about $28 last
summer, to nearly $43 per share today.
Now here's the kicker: It turns
out that the 42 year-old Martin Franklin is a serious adrenaline
junkie, just like a lot of skiers, particularly tele and backcountry
skiers. According to his Business Week bio, Franklin competes
in close to a dozen Ironman events each year, including the top
tier competitions in Hawaii and Lake Placid. It may very well
be that Jarden's acquisitions of big outdoor recreation companies
(not long ago Jarden bought Coleman, in the process creating
an "outdoor solutions unit" to which K2 product mangers
will presumably report) has more to do with Franklin's passions
than some of Jarden's other holdings.
In any case, one industry insider
we talked to over the weekend who is very familiar with K2's
tele and AT side of things had this to say, "Karhu, Line,
and K2 Telemark should be safe for quite sometime, even if Jarden's
immediate goal is cost cutting. They will have much bigger fish
to fry in the short-to-medium term." |