Bid for control of Columbia Sportswear China
Columbia Sportswear Company is moving to take over Columbia Sportswear China JV partner Swire Resources.
The US brand holds a 60 per cent shareholding, and the acquisition is subject to conditions, including regulatory approval in China. The transaction is expected to be completed in January.
Columbia president/CEO Tim Boyle says Swire Resources has been an exceptional partner “and we look forward to continuing our strong relationship in Hong Kong and Macau”.
He says Columbia was pleased with the performance of the JV, formed in 2014. “We have positioned the Columbia brand for long-term sustained growth in the crucial Chinese market. The acquisition is consistent with our strategy to accelerate investment as a brand-led, consumer-first business in the areas of highest growth potential for our brands”.
While the JV had an initial term of 20 years, there was a provision for the purchase or sale of the minority interest after the fifth year. Its sales in China last year totalled about US$168 million, generating low-teens operating margin.
Future plans include continued investments in building the Columbia brand in China, as well as expansion of direct and dealer-run retail locations. “We also intend to maintain the management team, staff, dealers and distribution networks that have helped the Columbia brand flourish in China,” says Boyle.
Jason Zhu will continue as GM of Columbia Sportswear Commercial (Shanghai) Company.
At the end of last year, the JV ran 86 retail stores in China, and was selling through brand-specific e-commerce sites in China across multiple platforms. It has distribution relationships with about 50 wholesale dealers running about 750 retail locations.
Swire Resources will continue as exclusive independent distributor of Columbia Sportswear in Hong Kong and Macau.
Founded in Portland, Oregon, in 1938, Columbia is selling its brands in about 90 countries.