A group consisting of China’s publicly traded ANTA Sports Group, an affiliate of FountainVest Partners, Lululemon founder Chip Wilson and Tencent will commence a 4.6 billion euro ($5.25 billion) offer for the parent of the Salomon, Arc’teryx, Peak Performance, Atomic, Mavic, Suunto, Wilson and Precor brands on Dec. 20. The bid represents a 39 percent premium on Amer Sports’ closing stock price on Sept. 10, the last trading day before Amer received preliminary interest from ANTA and FountainVest and a 14 percent premium on Amer’s closing price on Dec. 5, the day before the tender offer was formally disclosed.
While retaining Amer Sports’ corporate headquarters in Helsinki, Finland, the acquiring group says it intends to “invest significant time, resources and effort” to help Amer Sports “accelerate several important ongoing and new strategic initiatives under private ownership,” including expansion into the Chinese market. That effort would likely be accelerated, particularly for the Salomon and Arc’teryx brands, given Beijing will host the Winter Games in February 2022 and become the third consecutive Asian market to host the Olympics after PyeongChang, South Korea and Tokyo, Japan.
Upon completion of the tender offer, Amer Sports would operate independently from ANTA with a separate board. The ANTA brand was founded in 1991 and its parent company, which today also distributes the Fila and Descente brands in China among others, became a publicly traded company on the Hong Kong Stock Exchange in 2007. The investment consortium, meanwhile, has asked Heikki Takala, president and CEO of Amer Sports, to continue leading the company along with existing senior management.
“Amer Sports’ brands have exceptional potential for growth in an environment that is increasingly valuing quality, technically oriented soft goods,” said Wilson, Chairman of Hold It All Inc. and owner of Anamered Investments.
In another transaction last week, Marquee Brands, a brand management company that currently consists of Bruno Magli, Ben Sherman, Body Glove and others, acquired the Dakine brand and all related intellectual property. Simultaneously, Marquee struck a long-term license agreement with JR286, the acquirer of Dakine’s operating assets, to become Marquee Brands’ long-term operating partner for the brand that was founded in Maui, Hawaii in 1979 and is currently based in Hood River, OR and France. Dakine specializes in snow, surf and biking gear, packs and accessories.
Following a difficult four-year stretch in the U.S. bicycle market, show organizer Emerald Expositions has opted to scrap its annual Interbike show scheduled for Sept. 2019 in Reno, NV and layoff four staffers who worked exclusively on the event, including Justin Gottlieb, show director, and Jack Morrissey, marketing manager. All four will leave the company at month’s end.
Emerald Expositions’ Sports Group intends to research alternatives for Interbike in 2020 and beyond, perhaps launching bike-related events within or alongside its other multi-sport trade shows.
In separate developments, Emerald’s Outdoor Retailer show is moving to a three-day event in 2019, starting with the Jan. 30-Feb. 1 Snow Show in Denver, and ComplexCon is adding a show in Chicago (July 20-21) before returning to Long Beach, CA next November. The OR Summer Market will take place June 18-20 with a June 17 Demo Experience Day and next OR Winter Market is slated for Nov. 5-7, 2019.
“…We know it’s crucial to continue to evolve and enhance the shows and to take action on the feedback we’ve received,” said Marisa Nicholson, OR VP and show director. “What we learned is that three full days is sufficient.”
Meanwhile, The Fashion Footwear Association of New York (FFANY) has named former H.H. Brown and Nike executive John Heron its new executive director, starting Jan. 1. He replaces Ron Fromm, who stepped down earlier this year but continues overseeing FFANY’s philanthropic arm, The Fashion Footwear Charitable Foundation.
Senior management at Zumiez, coming out of a Q3 where total revenues inched 1.2 percent higher to $248.8 million and comparable store sales grew 4.8 percent, think the retailer is well positioned to be a dominant global player in the lifestyle segment given its strategic presence in seven countries on three continents and its digital savviness. To that end, ZUMZ continues to focus on localized fulfillment on its strategic roadmap. Meanwhile, while the retailer continues to search out and develop relationships with a host of up-and-coming brands, it confirms its Top 20 brands as a percentage of overall sales continue to grow with its Top Three brands representing slightly over 10 percent of Q3 revenues. North American product margins were described as “very strong” in Q3 where the region generated a 1.5 percent increase in overall revenues to $226.5 million. Footwear was the largest “comping category” in the period, followed by men’s, women’s and accessories.
Elsewhere, Genesco-owned Lids continued to struggle with store traffic in Q3 despite higher promotional activity. Headwear is currently “between trends,” noted GCO Chairman, president and CEO Bob Dennis, and was largely responsible for the lower traffic. NBA branded and NFL were up on a comp basis, but a shorter World Series, the Red Sox win and headwinds from the MLB playoffs were all drags to push the chain’s quarterly comp into negative territory at -2 percent. Dennis confirmed Genesco “has a reasonable prospect of accomplishing a sale of the Lids’ business,” but admitted the process is taking longer than initially thought.
At Dick’s, CEO Ed Stack reportedly told investors in attendance at the recent Goldman Sachs Retail Conference that DKS is considering exiting its Field & Stream chain of 35 stores across 18 states. The decision may come at the end of Q4, but rather than an outright shutdown could involve remerchandising and reconceptualizing the banner.
Bras, outerwear, digital and memberships will likely each play critical roles in Lululemon’s overall strategy to reach topline revenue of $4 billion by 2020.
“The opportunities are considerable, beginning with our digital and retail experiences, our brand and community expressions and, of course, our product,” CEO Calvin McDonald told investors last week as the company reported a 21 percent increase in Q3 revenues, 18 percent comparable sales growth, 35+ percent traffic growth to its ecommerce site and hiked its annual guidance. The brand’s Like Nothing bra, its first such garment designed to be worn all day, sold through strongly. On deck for 2019: More franchise product line extensions including a hydration vest, an offshoot from the Enlite high support bra that was introduced a few years ago.
While Lululemon generated double-digit comps in all major categories in Q3, growth was particularly strong in men’s and women’s outerwear that rose 150 percent and 40 percent, respectively, that was fueled by the Cloudscape jacket for women and Outpour Parka for men.
On the digital side of its business, Lululemon says it’s “ahead of schedule” in reaching 25 percent, full year penetration by 2020. In Q3, conversion rose high single digits as digital represented more than 25 percent of overall revenues. COO Stuart Haselden told analysts the Vancouver company has been able to automate most of its email marketing strategies while adding in personalization. Meanwhile, within its brick-and-mortar fleet, LULU has added BOPIS (Buy Online, Pick Up In Store) to 35 locations. It also projects that 40 percent of guests at 49 seasonal stores that will be operating in Q4 will be new to the brand.
Meanwhile, Lululemon has begun a pilot $128 membership loyalty program in the Edmonton, Canada market. Subscribers receive either a pant or pair of shorts designed exclusively for the program, access to classes and curated evens and free expedited shipping on ecommerce orders. During H1/19, LULU intends to “tinker” with the membership program, including possible adjustments to the annual fee and curation of services ahead of a likely wider launch.
In separate actions in New York and East China, more than 509,000 pairs of counterfeit Nike, Converse, and Vans footwear have been seized.
U.S. Customs and Border Protection at the Port of New York/New Jersey completed their seizure of 9,024 pairs of fake Nikes, valued at nearly $1.7 million, last week. The fakes, with a Chino, CA destination, were initially flagged by CBP officials in late September after arriving in the U.S. from Dongguan City, China. An investigation into the matter by Immigration and Customs Enforcement (ICE) continues.
Meanwhile, more than 500,000 pairs of counterfeit Converse and Vans shoes with a reported value of $87.5 million have been destroyed following a three-year investigation. Some of the shoes were destined for Middle Eastern countries. In Dec. 2016, a Chinese sting operation netted the fake products from five former factories in Guangdong, Fujian and Zhejiang and resulted in seven arrests.
Merrell’s new Gridway Collection, which debuts at retail for Spring/Summer ’19 and continues in Fall ’19, is made from recycled materials. Knit uppers, laces and EVA footbeds are made from 100-percent recycled materials. EVA midsoles are made with 40-percent recycled content from manufacturing scraps and the Vibram EcoDura outsole is manufactured with a minimum of 30-percent post-industrial scrap rubber.
Heidi O’Neill, a 20-year Nike veteran who oversaw the development and opening of the Nike Experience store on Fifth Avenue in New York City, now has an expanded role at the company. Besides spearheading the brand’s brick-and-mortar doors and Nike.com, she will also oversee all digital products and services while remaining president of Nike Direct.
Elsewhere, Lululemon recently promoted Sun Choe to Chief Product Officer. She has been heading the brand’s product organization since February. And Mountain Khaki has elevated 12-year company veteran Victoria Payne to CFO and VP. She has previously served as controller and direct of finance and administration for the Charlotte, NC company.
Bauerfeind, the 90-year-old maker of sports and medical knee supports, strikes a new multiyear partnership with the National Basketball Association that makes the brand’s GenuTrain NBA an officially-licensed knee support of the league. The product will be available Dec. 12 at sports retail locations nationwide and at bauerfeind.com. Additional global markets will launch in 2019. The NBA and Bauerfeind have had a relationship for more than a decade, starting when athletic trainers first introduced players to the original GenuTrain knee support. Dallas Mavericks’ power forward and 13-time All-Star Dirk Nowitzki is Bauerfeind’s official brand ambassador.
Global Golf Innovation Competition, a new “Shark Tank”-style competition for golf start-ups, will take place at the PGA Merchandise Show in Orlando next month. HYPE Sports Innovation will host the event in cooperation with PGA Worldwide Golf Exhibitions. Start-ups and innovators may apply at: Golf2019.HYPESportsInnovation.com/competition until Dec. 15. Ten finalists will present at the competition.
Kontoor Brands will be the name of the independent, publicly traded company that was formerly VF Corp.’s Jeanswear organization when the VFC spinoff is completed in H1/19. The company will consist of the Wrangler, Lee and Rock & Republic brands and be spearheaded by CEO Scott Baxter. Further details about Kontoor’s board, executive team, stock symbol and strategic direction will be revealed before the separation.
U.S. Imports hit two million containers in a month for the first time in October, according to Global Port Tracker, as retailers raced to bring merchandise into the U.S. ahead of the now-postponed increased tariffs on China imports. The October import total of 2.04 million Twenty-Foot Equivalent Units (TEU) was up 9 percent from Sept. and 13.6 percent year-over-year and topped the previous monthly import high of 1.9 million TEU in July 2018.
U.S. Soccer Foundation sued the U.S. Soccer Federation (USSF) in federal court in Washington, DC last week seeking a declaratory judgment of non-infringement of trademarks in an ongoing dispute over who controls the Foundation’s name and branding marks. The USSF recently demanded the Foundation, founded as a nonprofit in 1994 with surplus funds from the 1994 World Cup hosted by the U.S., cease using its name and logos.
U.S. Treasury task force is recommending the U.S. Postal service increase shipping prices on commercial packages, a move that could significantly impact the cost of deliveries from Walmart, Target and Amazon.
Patagonia is investing the $10 million in cash it received from last year’s federal tax cut into grassroot organizations focused on climate change and public lands.
SFIA, which saw bipartisan passage of the PHIT Act in the House in July, is hoping the Senate will include the bill in tax package that will be voted on this month. Last week, the trade group was urging members to Tweet or email their respective senators about the need to include PHIT in the tax package.
YETI, in its first reported quarter since filing an IPO, generated a 7 percent revenue jump to $196.1 million and 51 percent increase in profitability to $17.0 million for the period ended Sep. 29. Direct-to-Consumer sales rose 23 percent to $71.2 million. Wholesale revenues were flat at $125.0 million with lower cooler and equipment sales offsetting higher drinkware.