Salomon has announced that it will reduce its ski production in France to 35% of total production by 2007 from the current 55% level. Most of the shift in production is expected to go to Romania. Inline skates and Snowboard production will move to China. The plan includes the reduction of a total of 160 jobs in France over the next two years.
The restructuring program is expected to help Salomon improve its profitability and ensure long-term competitiveness in the market. Salomon employs more than 2,800 people worldwide and over 1,700 in France.
The move may signal some real pressure from the new K2 Sports power in the market which sees Volkl produce most of their goods in Eastern Europe, while K2 utilizes China for production.
Cristoph Bronder, president of Volkl and Marker worldwide operations, has evidently struck a nice balance with its manufacturing plant in Germany and new production in the Czech Republic. Gross margins at Volkl were nearly 41% in the last fiscal year ended March 31.
