HTM Chief Combines Business With Pleasure

Johan Eliasch started skiing by age 3, won a golfing trophy at 14, and collected two curling awards by the time he was 18.

Now 36, he has a scratch handicap in golf, plays tennis every chance he gets and scuba dives around the world.

Fitting credentials for the chief of Head Tyrolia Mares, a Vienna-based sporting goods company best known for its Head skis and tennis racquets, Tyrolia ski bindings and Mares scuba diving equipment.

Eliasch’s competitive athletic spirit could go a long way toward explaining his success in the sport he enjoys most of all: turning around ailing enterprises.

For 15 years, the native Swede has restructured companies in industries as diverse as shipping, oil and gas, consumer products, media and entertainment.

His most recent acquisition was the 1995 purchase of Head Tyrolia Mares for $1 million.

“This one I love because it was a turnaround combined with sports,” Eliasch says while visiting New York from London, where he lives with his wife and two children.

“Unfortunately, I do less skiing than normal and I play less tennis than normal because running this company is very intense and very time-consuming.”

But Eliasch combines business with pleasure when he can--and uses his athletic prowess to shamelessly garner publicity for his company: Earlier this year, he was a forerunner in the Hahnenkam Rennen World Cup downhill race in Kitzbuhel, Austria--using Head skis, of course--and in the downhill ski championships in Mellau, Austria.

“It’s a good marketing ploy,” he says. “No other ski executive has ever done it.”

Eliasch also participated in qualifying play for the British Open golf tournament for four consecutive years beginning in 1994.

When Eliasch bought HTM from the state-owned tobacco monopoly Austria Tabak, it was sinking under the weight of unprofitable businesses and struggling to regain its formerly dominant positions in the ski and tennis markets.

Head was once the king of tennis research--the company Howard Head founded in 1950 invented the first composite racquet, used by Arthur Ashe when he won Wimbledon in 1975--but had fallen behind both in terms of new products and its share of the U.S. market.

Head, which produced the first laminated metal ski, also was struggling to make a comeback on the slopes, where companies like Rossignol and Salomon were whizzing past.

“We were almost wiped off the map here,” Eliasch says.

He turned around HTM using a lesson he learned through many years of tough sports matches: Focus on what you’re good at and always keep an eye on the competitor.

First, he dumped what HTM was not so good at: sportswear and golf manufacturing, which Head now licenses to other companies, and Tyrolia skis and boots, which were not as successful as the ski bindings.

He didn’t need to tinker with the Mares division, which he notes was and still is No. 1 in scuba diving equipment worldwide.

Strengthening HTM’s core tennis and ski businesses required innovation. Soon after Eliasch took over, Head introduced an hourglass-shaped “carving” ski--one that allows skiers to make narrower turns without skidding--that was the first to appeal to average as well as expert skiers.

“Head was a company that seized on the shaped-ski trend very early and had some very excellent success,” says Andy Bigford, editor in chief of Ski Magazine.

Eliasch boasts that HTM is No. 1 in carving-ski sales worldwide and No. 2 for all skis, up from No. 5 just a few years ago.

Head lobbed a strategic serve into the tennis market last year, introducing a racquet made of titanium and graphite that is billed as the strongest and lightest available (It weighs 8 ounces unstrung, compared to the average racquet’s weight of 10 to 12 ounces).

The racquet, which Head sells with the slogan “The Power of Light,” was conceived by Eliasch, who was impressed by titanium’s effectiveness in golf balls and Head skis.

“The racquet is the hottest product on the market as far as the lip service and the buzz in the consumer racquet community,” says Eugene L. Scott, publisher and editor in chief of Tennis Week magazine. “It has made the other manufacturers, Prince and Wilson, nervous so that they have added titanium.”

The new racquet has helped double Head’s U.S. market share of dollars spent on tennis racquets in pro-specialty and sporting goods stores to nearly 22% this year, according to Sports Research Inc., a private, New Jersey-based market research company specializing in tennis, golf and skiing in the United States.

When Eliasch bought HTM in 1995, the company had a $119 million operating loss on sales of $401 million, he says. In 1997, the company had a $9 million operating surplus on sales of $287 million. And for 1998, he predicts a $21-million surplus on sales of $305 million.

Turning around a concern like HTM involved more than just experience, says Steve Banks, director of tennis for sporting goods manufacturer Spalding Sports Worldwide in Chicopee, Mass.

“It’s really the ability to think in very broad terms . . . cut through the clutter and the competitors, see what your best path is and be able to take that path.”

Eliasch agrees.

“Having an athletic background, it’s a bit of a game,” he says. “You want to beat the competition and excel. It’s fun to come up with new products, see that you have an impact out in the market, and also change the course of things. . . . That gives me a buzz.”

The English vernacular sounds funny, laden as it is with a heavy Swedish accent and emerging from what has been until now a very serious-looking face.

But it also makes sense coming from a man who is as comfortable kicking a soccer ball as he is sipping espresso in an expensive New York hotel.

Eliasch, who has been talking with executives about taking his company public next year or in 2000, is the picture of professionalism, his starched, white shirt adorned with royal-blue, gold-edged cufflinks; his navy, tailored Saville Row suit accompanied by a satin, blue-and pink-dotted handkerchief and complementing tie.

It is the outfit of a man who knows that in business, details count. It’s no coincidence that he twirls Head’s new titanium tennis racquet as he talks, a subtle reminder of the product he’s peddling.

The swivel of the hand also reveals a Swatch watch that matches the racquet’s gleaming metal.

“That’s why I picked it,” he admits, a mischievous light illuminating his hazel eyes. “It’s part of the job. This persuades people.”

Eliasch’s experience and education don’t hurt either. He took just three years to earn a bachelor’s and master’s degree in science from the Royal Institute of Technology and a bachelor’s in economics at Stockholm University.

“I got bored with it, so I said, ‘Let’s get it out of the way,’ ” he says.

He quickly entered the world of finance. Since 1991, he has been chairman of Equity Partners Group, a London-based investment group that fixes ailing companies. Before that, he was a partner and director of the Tufton Group, also of London and also specializing in turnarounds.

As for his increasingly thriving company, Eliasch says HTM is constantly researching new products and may consider adding other companies in the future.

Until then, he’s happy following the advice of a slogan he invented to accompany Head’s carved skis: “Enjoy the ride.”

“I’m enjoying the ride,” Eliasch says. “Restructuring a company is very time-consuming and you really have to roll up your sleeves and sort of dig yourself into the trenches.

“There are probably easier ways to make money than that, but I like doing it,” he says. “And I believe one should do what one likes the best.”