Yesterday Fox Racing Shox announced they would be buying “certain assets” from Marzocchi. According to Fox’s CEO, Larry L. Enterline:
We are excited to announce the agreement to acquire certain assets of the Marzocchi mountain bike product lines, which we believe is a significant opportunity for FOX to further expand the penetration of our bike suspension products across more price points.
Parsing this out, the “certain assets” statement is purposely vague, but at the very least we can assume one of those assets (and perhaps the most valuable) is the Marzocchi brand name. There may be some patents involved as well, though obviously Fox has been in the suspension business for years and has their own set of patents and workarounds in place for any crucial patents they don’t already hold. Existing stock, real estate, and parts probably aren’t valuable to Fox, so it seems possible these are the assets that will be excluded.
The reference to “more price points” in Fox’s statement is interesting and to me implies Fox may use the Marzocchi brand to sell at lower price points to avoid diluting the main Fox brand. Of course it’s also possible that Fox plans to use Marzocchi for really high end products, though that seems unlikely given that Fox would likely prefer to use their own brand in that capacity. The rest of the Fox statement seems to confirm this:
The Marzocchi team has a long history of performance suspension experience and we believe that this highly complementary transaction will allow for the increased growth of the Marzocchi brand worldwide. We expect this transaction will bring together and strengthen two highly complementary product lines and allow for FOX to leverage its marketing, engineering, distribution, and supply chain resources to drive increased top-line growth and profitability.
One of the easiest paths to brand growth is to make the brand more accessible by expanding to less expensive, mass market products.
Finally, Fox indicates they will be purchasing certain assets, but many consumer are just as concerned about what happens to an important liability: warranties. Again, there’s no way to tell what will happen on this front based on yesterday’s announcement, but we’ll keep you posted!
