Rapala ‘not considering’ US production switch says CEO

The complexity of fishing tackle production would not be suited to a country like the US with high labour costs.

That was the answer from Cyrille Viellard, President & CEO of Rapala VMC Corporation, following a question from a business analyst during the group’s presentation of its first half of the year accounts about the possibility of moving manufacturing to the US.

Rapala delivered an increase in revenue and profit in what has been a turbulent half year globally. However, following delivery of the results, the hot topics for discussion included the Trump administration’s introduction of tariffs – in part put in place to help drive the President’s crusade to bring back manufacturing to the USA.

In a webcast interview with analyst Thomas Westerholm, Viellard said: “All options are on the table, but manufacturing in the US is not on the agenda today.

“I have not seen an increase in our trade competitors for a shift in production to the US. We certainly do not consider it yet – the global situation is too uncertain to make such calls.”

During his visit to ICAST last month, Viellard said that according to the US industry trade representative body, the American Sportfishing Trade Association (ASA), more than 90% of fishing nets are made in China, as are 95% of rods, the majority of reels and 60% of hooks. “Between 60% to 80% of tackle is coming from China.

“The supply chain is highly integrated and manages a lot of SKUs. The tackle trade is a sector with a lot of diversity and low MOQs. Automation is complex and the industry relies more on lower labour cost countries. Our products are labour intensive.

“The US has low unemployment and higher wages. Industrially the trade is not set to start production in high cost countries. You can’t start an industry overnight.”

Viellard also talked about the tariff situation which he described as a ‘headache’ for everyone. “The tariffs highly influence the competitive nature of the market in the US. During the time when the China tariffs stood at 145% exports from the country were on hold and that impacted competitors who were dependent on the region because nothing moved.”

Viellard added that Rapala has handed down price increases following the implementation of tariffs. “They have been accepted because our customers in North America have appreciated that we have not introduced constant increases. We have done them all at once and not on all products.

“We have had to be able to take many actions that have allowed us to minimise the action of tariffs, but it has been very time consuming for all our teams. It is very tactical – you need to be fast to get the most out of every situation.

“As of now, all the decisions have been the right decisions.”

Viellard added that now is the time to refinance the company’s balance sheet. “Until now we have been very humble. We wanted to show that our business model is resilient and we are demonstrating that in turbulent times when other consumer goods producers are being hurt more than us.

“I expect our financing community – now they have seen that we are robust and that the risk related to our business is lower than they might have assessed – see that what we need now is to have a bit of oxygen. That will be the discussion in the coming months.

“We have good partners here in Finland and I really hope that they will say yes, we believe you, and that now we need to give you a bit of room.

“We have shown we are trustworthy. In the first half of the year we restored trust and now is the time for them to give us a hand.”

Viellard has hailed the decision of Sycamore Partners – owner of its rival Pure Fishing – to reduce its shares in Rapala VMC from 14.09% to 9.66%, transforming it from an active investor to a passive observer.

He said: “Sycamore’s investment was quite a significant one and it was unwanted as it did not go forward. Having an unwanted partner creates a lot of uneasiness.

“It has been very fair in the way it has acted as a shareholder of Rapala VMC. Nevertheless, it is not comfortable to have your competitor with whom you do not see synergies so close.

“The fact that they have completely pulled out brings clarity for all our stakeholders and employees. That is pretty positive.”

Rapala’s worldwide performance

Rapala VMC’s performance worldwide was a bit of a rollercoaster ride in the first half of its financial year with its biggest market delivering a 12% increase in revenue, while markets in Europe and the Nordics saw reverses.

North America
Sales in North America – Rapala’s largest global market – increased by 12% from the previous comparison period. With comparable translation exchange rates, sales were up by 14%. Favourable fishing conditions in Autumn 2024, combined with an exceptionally strong Winter fishing season in 2024/2025, enabled retailers to reduce their inventories by year-end. This supported robust replenishment sales of Winter products in the early part of the year and facilitated a healthy level of Spring load-in orders. Cyrille Viellard said: “Rivals were completely outpriced. Rapala had good inventory levels and excellent fill rates. At ICAST we were congratulated by all our big box customers for our service levels. Competitors that did not have the right level of inventory for the core Spring delivery time must have been impacted.” Sales growth was further driven by the successful launch of the new 13 Fishing branded product range, the continued strong performance of CrushCity soft plastic lures (above) and the solid momentum of all key brands.

Nordics
Sales in the Nordic market decreased by 4% from the comparison period. The year began with poor snow conditions. This led to exceptionally low replenishment sales of Winter sports equipment which had a significant impact on the sales of the region. On a positive note, past organisational changes in the fishing business are yielding positive results, enabling strong operational performance. Product availability remained good and increased sales were achieved in the majority of the key brands. However, the Summer season started somewhat later than usual, which impacted replenishment sales towards the end of the reporting period.

Rest of Europe
Sales in the Rest of Europe market decreased by 6% from the comparison period. Retailer carryover stock from the previous season impacted the sales in the region. The year began on a positive note, but momentum slowed significantly midway through the reporting period. Consumer activity remained subdued and retailers continued to exercise extreme caution with replenishment orders. Focus remained on core brands and as a highlight, the Okuma brand continued on a growth path.

Rest of the World
With reported translation exchange rates, sales in the Rest of the World market were at last’s year level. With comparable translation exchange rates, sales increased by 5% compared to the previous year. Sales in the Asian markets declined as ongoing global trade disputes continued to weigh on consumer sentiment and cause foreign exchange volatility. The competition landscape also evolved, with Asian fishing equipment manufacturers increasing their investments in domestic markets, thereby emerging as stronger local competitors. In contrast, Latin American markets performed well, supported by economic recovery and currency stability in key countries. These strengthened consumer confidence and supported the sales of imported products.