Bauer Performance Sports Ltd., a company that made its name in hockey, is increasingly relying on baseball, lacrosse and clothing to turn a profit.
The company said its first-quarter profit of $21-million (U.S.) was driven by a 43-per-cent rise in lacrosse equipment sales and a 57-per-cent increase in sports apparel, compared with the year-earlier quarter. But overall revenue rose 4 per cent, while hockey sales fell 2 per cent.
Kevin Davis, president and chief executive officer of Bauer, described the hockey market as "challenging." He said hockey sales fell as competitors Easton-Bell Sports Inc. and Reebok-CCM Hockey Inc. cut stick prices amid high inventories, and because Bauer last year enjoyed a one-time boost from the launch of a hockey equipment line.
Bauer does not break down its sales by sport, but spokesman ToryMazzola said hockey comprises a "significant majority" of its business.
The company describes growth of the overall Canadian hockey market as slow to flat. According to Statistics Canada, the hockey participation rate fell slightly between 2005 and 2010. During the same period, the participation rate in soccer grew to 14 per cent from 10 per cent.
Bauer has responded by looking to other sports, buying Combat Sports Inc., a maker of baseball and softball bats, a clothing maker, and Cascade Helmets Holdings Inc., which makes lacrosse equipment.
"They have to acquire at the pace they have just because their core business of hockey is shrinking," said Trevor Johnson, an analyst at National Bank Financial.
"They're still growing their hockey franchise at the expense of CCM and Easton," he said. "That has to change at some point, just because they're already at 55- to 60-per-cent [hockey] market share."
The company was founded in 1927 by the Bauer family in Waterloo, Ont. Nike became Bauer's owner in 1995 with the purchase of the skate maker's parent, Canstar. Kohlberg & Co. took Bauer public in 2011, three years after buying it from Nike. Today, Bauer is based in Exeter, N.H.
Cary Kaplan, president of Cosmos Sports, a sports marketing company in Mississauga, said the high cost of hockey equipment and league registration, coupled with the risk of injuries, can make soccer and basketball seem more appealing.
As part of its new program last year to boost the game's popularity, Bauer conducted a survey of 875 Canadian parents whose children do not play hockey. Respondents said the reasons they did not enroll their children in the sport included "crazy hockey parents," the high cost and the time commitment.
Bauer's Mr. Davis said he's "very excited" that National Hockey League games are back because it will keep the sport's profile high. "There are 600 to 700 players in the NHL, but there are six million kids playing hockey around the world … the six million are where we put a lot of our energy and focus."