Brunswick to sell fitness division to concentrate on marine
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Fishing boat manufacturer Brunswick Corporation is abandoning its long-time diversification strategy to concentrate on its marine business.
The Illinois company is to unload its fitness division, which it acquired for $310 million in 1997, to focus on its higher-margin marine parts and accessories operation.
Brunswick, whose assets include the Crestliner boat brand and Mercury engines, has also appointed a new Chief Executive in David Foulkes (57), President of Marine Customer Solutions, following the retirement of Chairman and CEO Mark Schwabero, at the end of this year.
Brunswick went on an acquisition spree in the late 1990s to broaden its offering of leisure products. Now it sees its marine parts and accessories business as less susceptible to economic slowdowns because it is driven by boat and engine usage, not just the purchase of new boats or engines.
However, the company faces other headwinds in the form of tariffs, which Schwabero has said will reduce 2018 earnings by between $10 million and $15 million. Next year the impact is expected to be around $30 million.
The ‘spin-off’ of the fitness division – a type of divestiture that involves the creation of an independent company – is scheduled for April, if the company doesn’t sell the unit outright before then.