Columbia Sportswear Company and Swire Resources to Form Joint Venture in China
JV Designed to Expand Columbia's Market-Leading Position in China
PORTLAND, Ore.--(BUSINESS WIRE)--
Columbia Sportswear Company (Nasdaq:COLM), a leading innovator in active
outdoor apparel, footwear, accessories and equipment, announced today
that it has entered into an agreement to form a joint venture with Swire
Resources Ltd. designed to expand the market-leading position of the
company's Columbia brand and to further establish and grow the Mountain
Hardwear brand in China.
Swire Resources Ltd., a subsidiary of Swire Pacific Limited (SEHK:00019)
(SEHK:00087), has operated as Columbia Sportswear's exclusive
independent distributor of Columbia and Mountain Hardwear branded
products in China since 2004, and in Hong Kong and Macau since 2002. In
China, Swire sells to a network of wholesale dealers that, at June 30,
2012, operated approximately 530 Columbia Sportswear retail locations
and 45 Mountain Hardwear retail locations in 135 cities. In addition,
Swire directly operates more than 70 Columbia branded retail locations
in 7 cities.
Swire Resources' 2011 Columbia sales in China totaled approximately $123
million, generating low double-digit EBITDA. Sales are on pace to
achieve double digit growth in 2012 and future plans include continued
expansion of dealer-operated and owned retail locations in additional
cities.
The new joint venture is expected to begin operations January 1, 2014
with headquarters in Shanghai. Columbia will own 60 percent of the JV;
Swire will own 40 percent, with profits and losses shared in similar
proportions. The joint venture carries an initial term of 20 years and
includes a provision for the purchase or sale of the minority interest
any time after the fifth year.
Tim Boyle, Columbia's president and chief executive officer, said, "We
are very excited about extending our relationship with Swire Resources
to pursue the significant long-term growth opportunities in China.
During the past eight years as our exclusive independent distributor,
Swire has established Columbia Sportswear as an authentic outdoor brand
in China, achieving a leading market position based on strong emotional
connections with consumers and superb operational capabilities. Swire's
expertise and deep understanding of Chinese consumers are vital to
driving continued growth of our brands in this important market."
JB Rae-Smith, Executive Director, Trading and Industrial Division of
Swire Pacific Ltd, said, "China's rapidly growing outdoor market is
benefiting from an expanding economy, increasing consumer discretionary
incomes, and greater interest in outdoor leisure activities. This new
joint venture with Columbia Sportswear provides critical resources to
capitalize on these long-term trends."
Swire Resources will continue to serve as the exclusive independent
distributor of Columbia Sportswear in Hong Kong and Macau.
The joint venture transaction is subject to various conditions,
including regulatory approval in China, and is expected to be completed
on or about the January 1, 2014 commencement date.
About Columbia Sportswear Company
Columbia Sportswear Company is a leading innovator in the global outdoor
apparel, footwear, accessories and equipment markets. Founded in 1938 in
Portland, Oregon, Columbia products are sold in approximately 100
countries and have earned an international reputation for innovation,
quality and performance. Columbia products feature innovative
technologies and designs that protect outdoor enthusiasts from the
elements, increase comfort, and make outdoor activities more enjoyable.
In addition to the Columbia® brand, Columbia Sportswear Company also
owns outdoor brands Mountain Hardwear®, Sorel®, and Montrail®. To learn
more, please visit the company's websites at www.columbia.com,
www.mountainhardwear.com,
www.sorel.com,
and www.montrail.com.
About Swire Resources Ltd.
Swire Resources Limited is a subsidiary of Swire Pacific Limited, one of
Hong Kong's leading listed companies with diversified interests in five
operating divisions: Property, Aviation, Beverages, Marine Services and
Trading & Industrial. Swire Resources acts as the holding company for
extensive retail and wholesale interests in sports and lifestyle
footwear and apparel. The company operates over 260 retail locations in
Hong Kong and Mainland China, primarily consisting of single brand
concept stores and three multi-brand sports and casual retail chains:
Marathon Sports, GigaSports, and Catalog stores. Marathon Sports, being
first opened in the early 1980s, is Hong Kong's largest sportswear
retail chain. Swire Pacific's operations are predominantly based in the
Greater China region, where the name Swire has been established for over
140 years. Its attributable profit in 2011 was US$4.13 billion and
employs over 73,000 staff worldwide. For more information, visit www.swirepacific.com.
Forward-Looking Statements
This document contains forward-looking statements within the meaning of
federal securities laws, including statements regarding the anticipated
commencement date of the company's new joint venture in China, the
company's ability to obtain necessary regulatory approval of the joint
venture, the expected rate of Swire Resources' 2012 sales growth in
China, plans to expand the joint venture's owned-retail and dealer-based
distribution in China, growth of the market for the company's brands in
China, and increasing consumer interest in outdoor activities in China.
Actual results could differ materially from those projected in these and
other forward-looking statements. The company's expectations, beliefs
and projections are expressed in good faith and are believed to have a
reasonable basis; however, each forward-looking statement involves a
number of risks and uncertainties, including those set forth in this
document, those described in the company's Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 2012 under the heading "Risk
Factors," and other risks and uncertainties that have been or may be
described from time to time in other reports filed by the company,
including reports on Form 8-K, Form 10-Q and Form 10-K. Potential risks
and uncertainties that may affect our future revenues, earnings and
performance and could cause the actual results of operations or
financial condition of the company to differ materially from those
expressed or implied by forward-looking statements in this document
include: inability to commence operation of the joint venture in a
timely manner; inability to obtain the necessary regulatory approvals to
commence the joint venture; operational disruptions resulting from the
transition to new management, support systems, and/or personnel; absence
of access to a qualified network of dealers to market the company's
brands; a decline in consumer demand for the company's products;
increased competitive responses to the company's efforts to expand its
brand power in the China market, international risks, including changes
in import limitations and tariffs or other duties, political instability
in China specifically or southeast Asia generally, exchange rate
fluctuations, and trade disruptions; our ability to attract and retain
key employees; the financial health of our customers and their continued
ability to access credit markets to fund their ongoing operations;
higher than expected rates of order cancellations; increased
consolidation of our retail customers; our ability to effectively source
and deliver our products to customers in a timely manner, the failure of
which could lead to increased costs and/or order cancellations;
unforeseen increases and volatility in input costs, such as cotton
and/or oil; our reliance on product acceptance by consumers; our
reliance on product innovations, which may involve greater regulatory
and manufacturing complexity and could pose greater risks of quality
issues or supply disruptions; the effects of unseasonable weather
(including, for example, warm weather in the winter and cold weather in
the spring), which affects consumer demand for the company's products;
our dependence on independent manufacturers and suppliers; our ability
to source finished products and components at competitive prices from
independent manufacturers in foreign countries that may experience
unexpected periods of inflation, labor and materials shortages or other
manufacturing disruptions; the effectiveness of our sales and marketing
efforts; intense competition in the industry; business disruptions and
acts of terrorism or military activities around the globe; and our
ability to establish and protect our intellectual property. The company
cautions that forward-looking statements are inherently less reliable
than historical information. The company does not undertake any duty to
update any of the forward-looking statements after the date of this
document to conform them to actual results or to reflect changes in
events, circumstances or its expectations. New factors emerge from time
to time and it is not possible for the company to predict all such
factors, nor can it assess the impact of each such factor or the extent
to which any factor, or combination of factors, may cause results to
differ materially from those contained in any forward-looking statement.
Columbia Sportswear
Investors:
Investor Relations and
Corporate Communications
Ron Parham, 503-985-4584
rparham@columbia.com
or
Media:
Public
Relations
Scott Trepanier, 503-985-4183
strepanier@columbia.com
or
Swire
Pacific Ltd.
Senior Manager, Group Public Affairs
Cindy
Cheung, 852-2840-8091 (Office)
852-9038-8495 (Mobile)
cindycheung@JSSHK.com
Source: Columbia Sportswear Company
News Provided by Acquire Media
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