What was changed
Polaris entered 2017 carrying three problems: a string of recalls tied to fire risk in some of its off-road vehicles, a reputation hit that had hurt the brand, and a motorcycle division anchored by Victory, a brand that had never really made money for the company.
Chief executive Scott Wine made the call to stop trying to fix Victory. In January 2017 Polaris announced it would wind down the brand entirely and put its resources behind its biggest, most profitable machines, the off-road vehicles it dominated, and behind the Indian marque it had relaunched.
The result was a strong recovery. By 2018 Polaris reported sales of $6.08 billion, up 12%, and net income of $335 million, up 94% from a year earlier. The restructuring and recall charges of the prior year were behind it, and the company no longer carried a brand that burned money.
Wine's own framing was that the company had returned to ``sustainable profitable growth,'' and the proof was in the leap in earnings and the guidance for more.
What it achieved
Net income rose 94% to $335 million in 2018 on sales of $6.08 billion, up 12%.
Why it worked
Victory Motorcycles had never been a profitable brand for the company.
Recalls and a tainted image had hurt demand and grown costs.
Wind-down let Polaris drop the ongoing losses of a chronic money-loser.
The freed capital and attention went to ORVs and the profitable Indian marque.
A leaner, recall-free company converted higher volume straight into profit.
What can be applied
Cutting a brand you love because it loses money is hard, but it frees cash and attention for the categories that drive the whole company.
Aftermath
Polaris kept growing after the Victory exit, expanding its ORV and Indian motorcycle businesses and using the stronger earnings to buy Boat Holdings and build its PG&A side. The 2018 rebound set the company up for further record years.
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