Mercury Athletic Case Essay

West Coast Fashions. Inc. ( WCF ) . a big interior decorator and seller of men’s and women’s branded dress late announced programs for a strategic reorganisation. Active Gear. Inc. ( AG ) . a in private held footwear company. was contemplating an acquisition chance. John Liedtke. the caput of concern development for AG. was interested in a WCF subordinate. The subordinate that Liedtke and AG intended to get was Mercury Athletic ( MA ) . a footwear company. Liedtke thought geting Mercury would approximately duplicate AG’s gross. increase its purchase with contract makers and spread out its presence with cardinal retail merchants and distributers. In order to supply a solid recommendation to Liedtke. farther analysis must be performed.
Market Overview
The dress or footwear industry is extremely competitory with low growing. The market is influenced by manner tendencies. monetary value. quality and manner. Companies can cut down hazard factors by non following manner tendencies which equates to efficient and effectual stock list direction and lost net income chances.

Active Gear
AG is a comparatively little athletic and insouciant footwear company. It has one-year grosss of $ 470. 3M ( 42 % of grosss came from athletic places ) . and $ 60. 4M of runing income. Projecting a shadow over these Numberss are AG’s typical rivals. AG’s typical rival has one-year gross revenues over $ 1. 0B. Because of Chinese fabrication contract consolidations. AG’s size was going a disadvantage due to low purchasing power vs. rivals. AG’s initial focal point was to bring forth and market high-quality forte places for golf and tennis participants. AG was among the first companies to offer stylish. walking. hike and boating footwear. Over the old ages. the firm’s athletic places had evolved from high-performance footwear to athletic manner wear with a authoritative image.
The firm’s traditional casual places besides offered authoritative styling. but were aimed at a broader. more mainstream market. AG’s mark demographic was urban and suburbanites. runing from 25-45 in age. AG’s distribution channels consisted of independent retail merchants. departmental shops. and jobbers. AG excluded large box retail merchants and price reduction shops. AG focused on merchandises that didn’t follow manner tendencies. ensuing in a elongated merchandise lifecycle. This concern theoretical account led to more efficient and effectual supply concatenation and operating direction. However. because they opted for the safe path it halted the company’s gross revenues and growing chance.
Mercury Athletic
Mercury Athletic was purchased by WCF from its laminitis Daniel Fiore. Fiore was forced to sell the company after running it for over 35 old ages. due to wellness jobs. Due to a strategic reorganisation. the program called for the divestiture of MA and other “non-core” WCF assets. MA had grosss of $ 431. 1M and an EBITDA of $ 51. 8M
Merchandises were distributed to departmental and price reduction shopsIt had two merchandise lines- athletic and insouciant footwearTarget market of both work forces and adult femalesShoes popularity grew in the utmost athleticss marketMA developed an operating substructure. leting direction to rapidly accommodate to alterations in client gustatory sensations with merchandise specifications. 1. Is Mercury an appropriate mark for AG? Why or why non?