There's been a lot of ink spilled on the sale and subsequent acquisition of Indian Motorcycle last month. The brand, resurrected by Polaris, is one of the most iconic American brands around, having begun operations over 100 years ago. But it's a brand that's suffered a lot of turmoil throughout its history, and I'm not sure if that's quite over with its new private equity owners, Carolwood Capital.
Before I get into why I think we're in for a rocky few years, I want to start with the fact that there's been no substantive change from the brand as of yet. Indian's new owners are still working on just divesting it from Polaris and its interconnected tendrils, all of which is understandable. Why start changing things when you're still trying to figure out what goes where, who does what, and splitting up a business that has a bunch of synergies?
But, recently, Carolwood Capital's Spencer Towill, who led the acquisition of Indian Motorcycle from Polaris, went on Bloomberg and offered some thoughts on the brand's future. And while most of his thoughts are vague to the point where nothing substantive is said, one details offered up about those future plans is an increased emphasis on merch, i.e., your t-shirts, your branded gear, etc.
That's a playbook that many have criticized both Harley-Davidson and Ferrari for following, as there's less emphasis on the actual product lineups compared to branded gear. Yet, while Ferrari's play worked, Harley's is far more suspect, and if that's the way Indian's heading, there's a reason to be concerned.
"We're extremely excited to be new stewards of the brands," starts Towhill, adding, "On what we would do differently from Polaris, I would say right, now we are focused on separating the large amount of entanglement from the parent company. And I'm looking forward to telling you more about our strategic plans in early 2026." He also added that while most other private equity groups are interested in short-term profits over long-term views, Carolwood operates with far longer strategies, which means in non-investor lingo, they aren't looking to flip the business in a year and a half.
That, at least, sounds good. And from someone who's operated within the space, having been employed by a few PE and VC businesses, a longer view means fewer yearly layoffs to "balance the books." Yet, while Carolwood brought in an actual motorcyclists to lead the brand, in the form of new CEO Mike Kennedy, who used to work for Harley-Davidson, one comment gave me pause, and that was "We definitely have plans to grow our apparel business in the new year."
This could be just a throwaway comment, one instigated by Bloomberg's Matt Miller, asking about a jacket and wanting to feel a brand's identity when he walks into his local Indian dealership. But emphasizing merch over product lineups is one play that a lot of brands have done over the years, and one that Indian's main competitor, Harley-Davidson, has played to such a degree, the Milwaukee brand now gets flack for being more an apparel company than a motorcycling one. Likewise, it really hasn't panned out in the same way that Ferrai's merch play did, with the Italian's netting more profit from licensing and merch than it does from its cars and SUVs. Harley is still struggling financially, and the company's crest is on everything.
And that should be somewhat concerning, as I wouldn't call Indian's merch game one of its main problems that needs to be fixed. Rather, Indian shares another Harley-Davidson problem, in that it really doesn't have an entry-level motorcycle, one that's more affordable to the masses, as well as approachable to those who don't ride yet. Harley is supposedly fixing that, with a $6,000 motorcycle coming in the near future. But there's been nothing on the Indian front even suggesting something along those lines from the rumor mill.
Hopefully, Towhill's comments were more or less just throwaways to Miller's odd series of questions, and Kennedy will have more substantive information soon, one that better resembles a roadmap for the iconic brand. But until then, what do you all think of the brand's new owners, their comments, and the future of Indian?
