OTTAWA — It was just a little swoosh. But when Nike added its logo to gear by Bauer, a longtime Canadian maker of hockey equipment, "there was resistance," said Terry Bovair, owner of the Fontaine Source for Sports in Peterborough, Ontario. "Some people did not buy the product."
Apparently, that kind of reaction was not confined to Peterborough, a small city northeast of Toronto that is something of a hockey hot spot.
Thirteen years after acquiring Bauer, and making bold promises that it would transform the business of hockey, Nike has put its Nike Bauer unit up for sale, a rare bit of comeuppance for one of the world's most powerful brands. Though Nike Bauer remains a market leader, many analysts predict that the company will find it hard to recover even half of the $395 million that it paid for Canstar Sports in Montreal, Bauer's parent, in December 1994.
"Perhaps they were too optimistic," said Brady Lemos, an analyst with Morningstar.
The shedding of Nike Bauer, which has annual sales of around $160 million, is not expected to affect Nike's financial reports significantly. The company posted revenue of $16.3 billion last year; it does not break out profit by unit.
But Nike's decision last September to step away from hockey at the same time it was increasing its presence in soccer showed that financial muscle and marketing power did not always give it the ability to dominate the field, or the ice.
"Nike has been a good competitor," said Denis Drolet, chief executive of Groupe Drolet, which owns Sher-Wood, in Sherbrooke, Quebec, a major maker of hockey sticks. "Bauer is a great name, they have a great line of skates. But the hockey market is not growing."
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Nike announced Monday that it will permanently cease its sponsorship of Hockey Canada in the wake of its handling of a high-profile alleged group sexual assault case. "Nike is no longer a sponsor of Hockey Canada," a company statement issued Monday said.
End of Nike's Hockey Venture: By 2008, Nike decided to move away from the hockey business. They sold Bauer to an investment firm, Kohlberg & Co., for $200 million. After this sale, the Nike branding was phased out, and Bauer returned as an independent brand in the hockey equipment business.
Nike actually bought Bauer's parent company Canstar in 1995 but sold their assets in 2008. You won't come across any Nike hockey equipment anymore, which is pretty sad.
Nike, Inc. has been accused of using sweatshops and worker abuse to produce footwear and apparel in East Asia. After rising prices and the increasing cost of labor in Korean and Taiwanese factories, Nike began contracting in countries elsewhere in Asia, which includes parts of India, Pakistan, and Indonesia.
In a statement issued to Sportsnet Monday morning, Hockey Canada said it was "appreciative of the longstanding partnership it had with Nike for over two decades and respects their decision not to continue as a Hockey Canada partner." Nike announced in October that it was pausing its relationship with the organization.
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