Polaris closes Victory operations, Dealers to liquidate inventory

Source: Victory/Polaris

MINNEAPOLIS, MN – Polaris Industries (NYSE:PII) today announced it will immediately begin winding down its Victory Motorcycles brand and related operations. Polaris said it will assist Dealers in liquidating existing inventories while continuing to supply parts for a period of 10 years, along with providing service and warranty coverage to Victory Dealers and owners.

Today’s announcement does not affect any other Polaris business units, the OEM said.

“This was an incredibly difficult decision for me, my team and the Polaris Board of Directors,” said Polaris Industries Chairman and CEO Scott Wine. “Over the past 18 years, we have invested not only resources, but our hearts and souls, into forging the Victory Motorcycles brand, and we are exceptionally proud of what our team has accomplished. Since inception, our teams have designed and produced nearly 60 Victory models that have been honored with 25 of the industry’s top awards. The experience, knowledge, infrastructure and capability we’ve built in those 18 years gave us the confidence to acquire and develop the Indian Motorcycle brand, so I would like to express my gratitude to everyone associated with Victory Motorcycles and celebrate your many contributions.”

Several factors influenced today’s announcement, Polaris stated. “Victory has struggled to establish the market share needed to succeed and be profitable. The competitive pressures of a challenging motorcycle market have increased the headwinds for the brand. Given the significant additional investments required for Victory to launch new global platforms that meet changing consumer preferences, and considering the strong performance and growth potential of Indian Motorcycle, the decision to more narrowly focus Polaris’ energy and investments became quite clear,” the OEM stated.

“This decision will improve the profitability of Polaris and our global motorcycle business, and will materially improve our competitive stance in the industry,” Wine said. The manufacturer plans to assign resources to Indian and Slingshot going forward, he added.

The closing of Victory enables Polaris to reduce operating costs. The company said it will maintain Indian production in Spirit Lake, IA, and Slingshot production in Huntsville, AL.

Any one-time costs associated with supporting Victory Dealers in selling their remaining inventory, the disposal of factory inventory, tooling, and other physical assets, and the cancellation of various supplier arrangements will be recorded in the 2017 income statement in respective sales, gross profit and operation expense. These costs will be excluded from Polaris’ provided 2017 sales and earnings guidance on a non-GAAP basis, the OEM noted.

Polaris will release its fourth quarter and full-year 2016 financial results and provide 2017 guidance on Jan. 24.

From a Polaris press release