While at SIA (Snowsports Industry of America) earlier this year there were rumors and rumblings about the Elan Snowboard factory filing for bankruptcy. Talking with numerous sources it was confirmed that the factory was not performing so well and operating at a loss which prompted the Slovenian government to pull its aid. As of March 15th a blurb was posted on the ISPO news blog about this.
Based in the Austrian town of Fürnitz, the snowboard factory of Elan has filed for bankruptcy, according to local media. The production plant, which employs 78 people, suffered from heightened costs for raw materials and the loss of OEM production assignments. The situation apparently became untenable after the factory’s Slovenian parent company refused to come to the rescue. Der Standard, the Austrian newspaper, reports that debts are as high as €8.7 million and that the banks involved were no longer willing to provide the necessary guarantees. Back in 2011, the plant’s turnover was up by 5.5 percent to €18.25 million, but with an operating loss of €1.5 million. In 2012, total sales plummeted to €13.75 million, whereas the operating costs remained more or less stable.
What does this mean for the snowboard industry? It could mean any number of things as bankruptcy does not always cause a company to disappear. Just look at the automotive or airline industries. How many times have they gone bankrupt and survived? This could just mean they’re looking for a cash injection although from looking at previous stories about Elan this doesn’t bode well for them. Back in January Argus Capital had sent a letter of intent to take over the stake indirectly owned by the Slovenian state with the final sale being some time in April. As it is March and Elan has since had to appeal it’s €10 million state aid this does not look likely.
Another factor to look into is that George Cant and John Colvin have left Elan to start SWS Snowboard Production in Dubai. You can read their recent interview from Transworld Business here. Two guys that had become heavily invested in the development of technology at Elan are now gone.
Talking with our sources we were informed that there was an industry pow-wow behind closed doors at SIA to discuss how to go about working with Elan so as to not disrupt companies production schedules or the 2014 product. One of our sources even went on to say, “The boards you see here today might not even be produced or will be produced at other factories.” Needless to say there are companies heavily invested in production at Elan that could effect them in both the short and long term.
For more back information on Elans financial aid help you can read about it here.