Quiksilver Heads for the Slopes

Like, dude, grab your skis. We've got powder!

Perhaps it's a clash of cultures, but surfer and skateboard company Quiksilver (NYSE: ZQK) has approached French ski maker Rossignol (OTC BB: SKIRF) to take over operations in an estimated $420 million deal.

For a clothing manufacturer that was previously competing against the likes of Pacific Sunwear (Nasdaq: PSUN), Vans, and Skechers (NYSE: SKX), adding a line of skis and equipment to its stable may seem like an odd pairing. Yet it might not be so much about the skis as it is about the fashion. The surfer look has invaded the slopes as nontraditional winter sports such as snowboarding have vied with skiing for attention. Slapping the Rossignol name on a line of clothing could make marketing sense.

It's been that dash of style that has enabled Quiksilver to expand beyond just the surf and skate market into streetwear. Sales at the company shot past the $1 billion mark this year, and fourth-quarter profits rose 43% over last year. Riding the wave of sales and profit growth probably emboldened the clothing manufacturer to make a bid for the ski maker. Consolidation in the sporting goods market has been under way for some time, and Quiksilver may end up competing against K2 (Nasdaq: KTO) or even Nike (NYSE: NKE) for rights to Rossignol. K2 has been on a binge of its own, rolling up the industry under its own roof.

Even though Rossignol is the largest ski equipment maker, revenues have been falling for three years, and sales for the first half of this fiscal year were flat at around $271 million while profits have fallen by two-thirds to about $4 million at current exchange rates. With succession problems rising to the top lately, the company undoubtedly is entertaining offers more seriously these days. Board chairman Laurent Boix-Vives owns 45% of the company and holds 63% of the voting rights, and his family sits in four of the five supervisory board seats. Not exactly independent management, but it could bode well for Quiksilver in any resulting bidding war as its CEO, Bernard Mariette, is a longtime Boix-Vives family friend.

Rossignol reported that although an offer was received it has not responded to it and no decision has been made on whether it will be accepted. While Quiksilver's motivation may be to expand into outdoor activities, Rossignol has sought to diversify away from its reliance upon winter sports. A union of the two might allow that to happen, even if it seems as oddball as a marriage between Jeff Spicoli and Picabo Street.

Fool contributor Rich Duprey has had a few oddball marriages of his own. He owns shares of K2 but does not own any of the other stocks mentioned in this article.