After reporting large sales gains in the Winter Sports division in Q3, Head NV is saying that Q4 numbers are coming in even stronger. For the two months ending November 30th, Head saw total sales rise 15.6% to $115.5 million. According to the company, a majority of this increase is due to higher sales volume in the Winter Sports category and not currency fluctuations.
In fact, Head is saying that they expect sales in their other two divisions Racquet and Diving to come in lower than last year. Apparently Head is taking large portions of market share from its competitors — enough to offset losses in sales elsewhere and provide an overall increase for the year.
Head also announced that the company is undertaking an aggressive cost-reduction campaign. They have already closed their manufacturing plant in Estonia and moved production to Litovel, in the Czech Republic. These manufacturing operations will share administrative and management resources with its existing infrastructure in Austria.
Additionally, Head will cease production in its Austrian plant and move it to Budejovice, also in the Czech Republic, where production costs are considerably lower.
Head had previously transferred much of its Kennelbach racquet production to Budejovice. Subject to certain union consultations, Head is in the process of closing its tennis ball production facility in Mullingar, Ireland and transferring these operations to its existing under-utilized plant in Phoenix, AZ.
And finally, Head is centralizing its European distribution organizations for Winter Sports and Racquet Sports products so that its subsidiary, Head International GmbH, will operate as a single European distribution company.
The company claims that quality and proprietary technology will not be compromised by the cost-cuts, and continues to investigate further cost-saving strategies, including moving certain production facilities to China.
>>> SEW would like to check out the new Budejovice factory, this town also is home of the original “Budvar” a.k.a. “Budweiser” brewery
