Is this the end for Aqualung?

Already 80 years ago, in 1943, the invention of the aqualung marked a major turning point in the world of scuba diving. Since then, many manufacturers of diving equipment have emerged, but Aqualung, formerly known as Spirotechnique, has managed to position itself as the undisputed leader in the industry. Thanks to strategic acquisitions, the company has been able to integrate the know-how of renowned brands such as US.Divers, Technisub, Sea Quest and Apeks.

Current challenges: The impact of the Covid-19 pandemic on the diving industry

However, according to reports from Darcy Kieran of Scubanomics, Aqualung is currently going through a difficult period and could even be facing possible bankruptcy. The Covid-19 pandemic has undeniably impacted the entire diving industry, and equipment sales statistics in the United States indicate a decline of approximately 12% compared to the post-Covid period. Compared to other sectors of the nautical industry, the sale of diving equipment recorded a drop of approximately 46%. Darcy Kieran supports his assertions on figures supported by the SFIA, an American organization specialized in sports statistics. Unfortunately, despite our attempts to contact them, the SFIA chose not to respond.

The contrasting evolution of the diving markets: Asia in full expansion

In the United States and Europe, certification agencies are having difficulty attracting new generations, and the population of divers is aging. While this may be true in Europe, it is absolutely not the case in Asia. According Jean-Claude Monachon expert in diving marketing, Asia is a booming market. SSI managed to establish a foothold there and take the lead. Thanks to a varied range of certifications and unusual courses, such as the mermaid program, SSI has established itself as a leader in freediving training, a discipline that is more sporty and close to nature. The same goes for technical diving.

All of this has allowed SSI to target its audience more precisely and appeal to a younger audience. While in the West, agencies like PADI try to break into freediving or technical diving, their programs are less advantageous and generally less well recognized by enthusiasts of these disciplines.

Bruno Cercley's vision: A restructuring strategy to overcome difficulties

While the situation seems worrying for Aqualung, it should be emphasized that these difficulties cannot be entirely attributed to the pandemic. Competing manufacturers such as Scubapro saw record sales in 2022, highlighting the specific challenges Aqualung faces. Nevertheless, Bruno Cercley, CEO of Aqualung, remains optimistic about the company's future. Building on its previous success in taking over the Rossignol ski business, it is considering a restructuring strategy aimed at streamlining Aqualung's product range by reducing its stock keeping unit. However, this does not mean that the company will stop innovating, as evidenced by the recent releases of products such as the Heliox regulator and the Apeks DSX computer.

Temporary financial support: The emergency loan from the French state and the injection of funds by Montagu

To better understand the situation of Aqualung, it is essential to review its history. Originally, Aqualung belonged to the Air Liquide group, but in 2018, just before the outbreak of the pandemic, it was acquired by the Montagu group, which now manages the company through Alizé. This takeover was carried out using a technique of leveraged finance, a risky strategy that did not anticipate the devastating impact of Covid-19. Faced with this crisis, the company benefited from an emergency loan from the French State in the amount of 17,5 million euros, the debt of which is guaranteed with no obligation to repay until September 2022. Following a court decision in 2022, Montagu was forced to reinject an additional €15 million to support Aqualung. This was combined with the need to find an additional €18 million to meet business needs.

Aqualung, which employs nearly 800 people in different countries and achieves an annual turnover of around 200 million euros, is facing a delicate situation. The sale of their US headquarters to Vista for $20 million attests to these difficulties.

Hope for the Future: Favorable Growth Projections for 2023

However, Bruno Cercley, with its experience in corporate restructuring, remains confident in Aqualung's ability to overcome these obstacles. Growth projections for 2023 are favorable, according to a recent company statement.

Overall, Aqualung's current situation is concerning, but the company hopes to recover through a restructuring strategy and a focus on top-performing products. The scuba diving industry remains dynamic. It is to be hoped that Aqualung finds solutions to overcome these difficulties and regain its leading position.

source scubanomics Mr. Darcy Kieran.

and Dive news wire