Dorel Sports Sells SUGOI and Sombrio to Louis Garneau Sports IncMontreal, Quebec -
Dorel Industries Inc. (TSX: DII.B, DII.A) today announced that its Dorel Sports segment has sold the SUGOI and Sombrio brands to Louis Garneau Sports Inc., divesting its performance apparel line of business to focus on its core strategic businesses of bikes, parts and accessories and electric ride-ons.
“Despite the strong brands and products in SUGOI and Sombrio, apparel is not a strategic priority and has been a drain on Dorel’s financials. It is in the best interests of our shareholders for us to focus on our core businesses. SUGOI and Sombrio are a perfect fit for Louis Garneau Sports Inc. They specialize in cycling apparel and I am confident both brands will reinforce their excellent product offerings to retailers worldwide,” stated Dorel President & CEO, Martin Schwartz.
As a result of the sale of the performance apparel line of business, Dorel expects to record an estimated amount of US$11 million of restructuring and other costs during the second quarter ending June 30, 2018, mainly related to non-cash charges associated with the write-down of trademarks and non-cash inventory markdowns. This amount may be subject to change once Dorel finalizes its analysis of the transaction. Dorel will provide additional details and updates in its 2018 second quarter consolidated financial statements, which is expected to be issued on August 3, 2018.
Dorel acquired SUGOI Performance Apparel in February of 2008 with the purchase of Cannondale Bicycle Corp. from Pegasus Capital Advisors. Dorel later purchased Sombrio in January of 2014.