In a recent post, Bicycle Retailer announced
that Vista Outdoor reduced the workforce at Bell Sports, Giro and Blackburn headquarters in Scotts Valley, California, by 14 employees from a range of positions including engineering, design, testing and marketing. Layoffs included longstanding managers, which suggests that the positions will be permanently closed. Reportedly, the explanation was that Vista was downsizing the brands to better fit the current landscape.
"We came to clear conclusion as a team and as a board that we are much better off holding this asset and continuing to improve it for a period of time. That will be a multiyear period of time. We see that much upside in the business. At this point in time we’re excited about holding it; we think it’s the best thing to do for driving shareholder value.”
The news comes on the heels of Vista's 170 million dollar deal to divest itself from firearms
- which, BRAIN reported, will be used to pay down debt. Presumably, some of that cash will help prop up Vista's cycling brands
In an announcement earlier this year, Vista reversed its decision to sell off Bell and Giro, saying that they thought they were undervalued at the time, maintaining that the brands were capable of returning to category leadership roles. The new plan is long-term restructure, after which the Vista team will reassess whether they will retain the brands or again offer them for sale. As quoted in the BRAIN story, Bell CEO Chris Metz says:
Scotts Valley is located just up the hill from Santa Cruz and is an equally expensive location to run a business. Bell and Giro's neighbor, Fox Racing Shox, recently moved its new headquarters to Hall County, Georgia
, and much of its nearby Watsonville operation to Reno, Nevada, saying that hiring and keeping skilled workers was made difficult by California's hyper-inflated cost of living.
With Fortune 500 corporations vying for industrial space in Scotts Valley, the writing may be on the wall for any cycling brand taking up space there. If that proves true, and Vista holds to its stated course, Bell, Giro and Blackburn's remaining staff should not get too comfortable in their chairs.