Louisville Slugger sold, workforce cut

Hillerich and Bradsby, the 131-year-old homegrown Louisville company, announced Monday it's selling its iconic Louisville Slugger brand to Wilson Sporting Goods, cutting 52 employees or a fifth of its workforce.

Under the $70 million cash deal due to close in June, Wilson would acquire global brand, sales and innovation rights to Louisville Slugger, pending H&B shareholder approval.

H&B would continue manufacturing all Louisville Slugger-branded Major League Baseball, minor league, amateur and souvenir wooden bats for Wilson, while maintaining ownership of the Louisville Slugger Museum & Factory. Its Bionic gloves and Powerbilt golf brand are not part of the deal.

Shrinking resources and the prospect of keeping pace with better-funded multiational companies drove the family to consider an acquisition about 18 months ago, John A. Hillerich IV, H&B's chief executive officer, said at a news briefing Monday.

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"It was not an easy decision, nor one I took lightly."

Mayor Greg Fischer said in a statement that he's glad the Slugger operations, including the popular tourist attraction that draws visitors from across the globe, will remain in the city.

The Louisville company intends to pay off undisclosed debt and use remaining sale proceeds to improve the bat production facility, invest in its Bionic brand and make improvements to its museum exhibits, Hillerich said.

The Wilson deal may mean an expansion beyond the one shift per day production to two shifts, but they don't anticipate enlarging the factory's footprint, he added.

H&B now employs 273 people, but the workforce will shrink to 177 in the next four months. Forty-four of the jobs, roughly half of which are sales positions in the field, will be shifted to Wilson. The 52 employees slated for layoffs work in administrative support, including IT, credit and accounts payable positions, he said, adding that it's an "unfortunate situation" that will ultimately increase efficiency.

The company also maintains a warehouse near University of Louisville's campus where bats from the 800 W. Main St. factory are shipped to customers. The mostly part-time workforce there will shift to the downtown offices, and Slugger will ship bats directly to Wilson where it handle shipping and order fulfillment, Hillerich said.

The Louisville facility likely would serve as storage for the Louisville factory and Bionic, he said.

Wilson, with annual sales exceeding $700 million, makes and sell gloves, bats, uniforms, apparel, protective gear, accessories and pitching machines through Wilson, DeMarini and ATEC brands. Its president, Mike Dowse, outlined plans during the announcement to grow Slugger's sales, utilizing a domestic and global network established by Wilson parent Amer Sports, of Helsinki, Finland.

Amer sells and markets sports equipment, apparel and footwear, including Salomon, Precor, Atomic, Mavic, Suunto and Arc'teryx brands in over 30 countries through a number of subsidiaries. The company's main market areas are the U.S., Europe and Japan.

Because Louisville Slugger sells 90 percent of its products in the U.S., Wilson sees an opportunity to boost overseas sales. Dowse pointed to DeMarini, a stand-alone brand whose production has quadrupled since Wilson acquired it in 2000.

"When we do acquisitions, we're all in," Dowse said, adding that between Wilson, ATEC, DeMarini and Slugger, the company would become the No. 1 baseball equipment maker in the world.

Hillerich, who is the great grandson of Bud Hillerich, the family's first bat craftsman, said the family ownership group includes him, his father Jack, a sister and three cousins. They formed a family council to ensure that they communicated about the business and any dealings going forward.

Hillerich and Dowse declined to disclose the terms or length of the long-term vendor agreement.

When asked about H&B's debt, Hillerich declined to give a number, but he said cash flow was becoming an increasing concern. A "hiccup" in the business in the next few years could caused problems for the company, he said.

At one point during the briefing, Hillerich grew emotional and slugged a sip of water when he spoke of his family's commitment to do what was best for the business and family unity.

They were determined to avoid the "tragedy" of a rift like the one that split the Bingham family, he said, referring to a falling out that led to break up and sale of the family's media empire three decades ago.

Hillerich said: "We didn't ever want that to happen in our family."

Reporter Grace Schneider can be reached at 502-582-4082. Follow her on Twitter @gesinfk.



