Business News :Bauer Joins S&P/TSX SmallCap Index

Bauer Performance Sports CEO Kevin Davis at TSX 

TORONTO - Bauer Performance Sports says its sales will grow as it invests in research and development for new gear to protect hockey players, amid growing controversy over the climbing tally of concussions in the NHL.

Bauer is currently the biggest player by far in the hockey equipment market, and its CEO said the company will spend money on creating new products to expand its sales rather than focus on selling more of its existing gear.

Kevin Davis said Thursday that one example is neck protectors required for almost two thirds of the one million kids around the world registered in youth hockey.

"The current solution was really big and bulky and hot and kids didn't like to wear it so we integrated it with our base layer shirt and it's a new product for us," he said.

"That's a product that didn't exist last year. Even the industry itself can grow when new innovation comes in."

He added that the company acquired Mission Roller Hockey and Maverik Lacrosse in the last three years to expand sales into other sports and says Bauer is looking for other potential acquisition targets.

He said the company is also making changes on helmets, but wouldn't reveal upcoming new features.

Helmets are a hot issue as several star NHL players including Sidney Crosby and Dallas' Brad Richards are sitting out much of the season due to concussions. Website theconcussionblog.com estimates 72 NHL players have been sidelined because of the head injury this year.

Even Prime Minister Stephen Harper has expressed his concern over the climbing number of concussions and suggested the league take a serious look at the issue.

Montreal police are investigating the latest incident, which left Canadiens forward Max Pacioretty hospitalized with a severe concussion and fractured neck bone after a hit by Bruins captain Zdeno Chara.

Davis made the comments Thursday on new potential products as the hockey equipment maker began life as a publicly traded company on the Toronto Stock Exchange.

The newly listed shares (TSX:BAU) ended their first day at $7.45, five cents below their issue price of $7.50.

The hockey equipment industry shows some potential for increased sales.

Hockey Canada estimates fewer boys will enrol in hockey this year, but says sales to women, girls and new Canadians show opportunities for growth.

Ryan Kennedy, a writer and editor at The Hockey News magazine said the market for boys hockey equipment in Canada is likely to be stagnant over the next few years, but the market is growing internationally.

"Participation in the U.S. is continuing to go up. It's a matter of (Bauer) establishing their brand and beating out the likes of (rivals) Reebok and Easton and then there's second tier companies like Warrior and Eagle," he said.

"Another market that I know a lot of people are going after is Russia. Companies are already establishing their little boutiques in stores and the fact that Alex Ovechkin is a huge star helps that," he said, explaining that Reebok-owned hockey equipment maker CCM is targeting Russian kids and signing up young NHL stars to endorsement contracts.

Bauer gear is used by National Hockey League stars including Tampa Lightning centre Steve Stamkos, Chicago Blackhawks captain Jonathan Toews and teammate Patrick Kane.

While it's best known for its sticks and skates, Bauer makes a full range of gear from pads to helmets to pants.

Founded in Kitchener, Ont., in 1927, Bauer developed the first skate with a blade permanently attached to a boot.

The company focused on skates until 1990, when it acquired the hockey assets of another Canadian hockey icon, equipment maker Cooper Canada Ltd.

In 1995, Bauer was bought by Nike Inc. for $430 million.

Nike sold the company for $200 million to U.S.-based private equity firm Kohlberg & Co. and Roustan Capital, a firm owned by Quebec-born businessman Graeme Roustan in 2008.

The private equity investors hold a two-thirds stake in the company following the initial public offering.

( Source Mary Gazze, The Canadian Press through www.1310news.com )