Intrawest owner hurting

[ski_resort_observer]

I realize that there are only a few people in here who have any interest in the stock/financial markets. I'm very interested in stocks/companies that have some sort of connection with the ski resort business.

AIG continues to make news with their problems. As people have mentioned, sure, the business of Stowe is but a drop in the bucket for a business as huge as AIG but I do believe there is some connection not seen by guests. Is Stowe a positive drop in the bucket or a negetive.?

Fortress which bought Intrawest awhile back is one of several equity firms which has not done well in the last year or so. Their stock has been beaten down badly(-50%) since it purchased Intrawest. When Intrawest was on it's own, the company made money, their stock performed well.

With these parent companies of ski resort doing so poorly... will it effect their investments in ski resorts. If your in senior management or a major investor and watching their investments continue to lose value, won't there be some sort of pressure to reduce costs and raise prices for all these resorts owned by AIG, CNL(owns the Boyne and former Booth Creek resorts), Ginn(Burke), Fortress(owns Intrawest) as well as others.

There are current success stories....Vail Resorts continues to do well and their stock as well. Interestingly they recently announced some creative below market season pass deals.

 

[ctenidae]

Being on that side of things, I will say that the public stock performance of private equity shops is not really indicative of the overall performance of the group, much less the individual funds (Fortress is on Fund VI, btw), and certainly not the individual portfolio companies.

While what I can say is limited, public info on Intrawest includes the fact that Bill Jensen will be moving from Vail to Intrawest in June. Very little else I can say, except Fortress is upbeat on Intrawest's prospects, especially the real estate and CMH.

 

[SkiDork]

I keep looking at this title to this thread and think it says

Intrawest Owner Hurling

 

[gladerider]

i think management perspectives are different from one scenario to another. sometimes an equity firm's objective for an acquisition/funding is different from another company's M&A objective. PE firms normally have portfolios. some PE portfolios are for fund creation. some PEs are turnaround specialists. many PEs are niche players. many fund related portfolios today are realestate plays.

realestate funds driven acquisitions are taking some hits right now from stock performance-wise. but, many of these funds probably are taking bigger hits from their credit related debt management more than the actual stock fluctuation. i am willing to bet that the current bad stock performance is due to the investors accounting this very problem into their pricing rather than the actual P/L performance of each holding in their portfolio.

intrawest was a very interesting company. it's a horizontal integration play driven by realestate development profits. i respect the owners a lot for their call making to sell out at the right time. they sold when the opportunities were still peaking. vancouver landing the winter olympics just added more credibility to their prudent business execution in Whistler. but at the end of the day, these guys knew skiing industry; which i believe was crucial to their success.
i don't know fortress well, so i don't know their play enough to comment, but intrawest was a good play.

bottom line, when a ski resort is bought buy a non-industry people, i give them less than 50% of long term success. i also think that it is difficult to build a vision if you are an outsider and don't know the business. sometimes senior mgmt gets lost in the frenzy and hoopla. they make wrong decisions. case in point, apple. that company went no where without Steven Jobs. no matter what industry and what PE, it takes a visionary to do well, IMHO.

i see one thing different with intrawest after the sales. they spend a lot of money on marketing. will it raise my cost to visit intrawest resort? likely.

 

[ctenidae]

i see one thing different with intrawest after the sales. they spend a lot of money on marketing. will it raise my cost to visit intrawest resort? likely.

One of the things they've done, and part of the reason I think they brought in Jensen, is reorganize management. Previously, Intrawest ran each area individually, and within the are real estate and operations were handled seperately, with littl or no communication between the two, much less between different resorts. You can imagine the amound of duplication and poor communication this would cause. By consolidating a lot of functions (why have 13 HR departments, 13 accounting units, etc, when you can have 1?), they've saved a lot of money.

On the advertising side, with better coordination it becomes a lot easier to spend more wisely- look at what the Muellers do- every ad for Sunapee is also an ad for Okemo and Crested Butte. So, while Intrawest may be getting much better coverage, they're probably spending less.

On the publicly-traded private equity group angle, I highly doubt the IPOs were a financing event for any of them. They provided liquidity for the founders, and a simpler way to transfer equity to the next generation of Managing Directors. I never considered it to be a good investment, and have advised against anyone putting them into their portfolios.

 

[GrilledSteezeSandwich]

I keep looking at this title to this thread and think it says

Intrawest Owner Hurling

ahahahaha