Columbia Sportswear Company (Nasdaq:COLM), a leading innovator in active
outdoor apparel, footwear, accessories and equipment, announced today
that its joint venture with Swire Resources Ltd. commenced operation as
planned on January 1, 2014. Also, as previously planned and announced,
29-year Swire Resources veteran Samson Wong was appointed president of
the joint venture – Columbia Sportswear Commercial (Shanghai) Company –
headquartered in Shanghai.
Tim Boyle, Columbia’s president and chief executive officer, said, “We
are very pleased with the official launch of this new joint venture,
marking the beginning of a new and deeper level of cooperation with
Swire Resources. Swire has established Columbia Sportswear and Mountain
Hardwear as authentic, premium outdoor brands, founded on strong
emotional connections with consumers, trusted relationships with
wholesale dealers, outstanding owned retail locations, and superb
operational capabilities.
“We are looking forward to pursuing what we believe are significant
long-term growth opportunities, capitalizing on the continuity and
expertise of the joint venture’s management and employees, and their
deep understanding of the China market.”
The joint venture inherits the broad distribution network established
over the past nine years by Swire Resources, which has acted as
Columbia’s exclusive distributor in China since 2004. That network
consists of 51 wholesale dealers that, at December 31, 2013, operated
approximately 660 Columbia Sportswear retail locations and 47 Mountain
Hardwear retail locations in 180 cities. In addition, the joint venture
directly operates approximately 70 Columbia branded retail locations in
7 cities.
To promote operational continuity, at commencement, the joint venture
was staffed primarily by management, administrative and retail
operations personnel who transferred from comparable roles they held at
Swire Resources.
Samson Wong, joint venture president, added, “I am honored to lead this
team of seasoned employees. The financial and operating resources both
joint venture partners are investing come at a critical time in the
evolution of the dynamic, growing and increasingly competitive outdoor
apparel and footwear market in China.”
JB Rae-Smith, Executive Director, Trading and Industrial Division of
Swire Pacific Ltd, said, “China’s outdoor market is benefiting from
increasing consumer affluence, greater interest in outdoor leisure
activities, and increased investment from global and domestic outdoor
brands. We look forward to working more closely with Columbia Sportswear
to capitalize on these favorable long-term trends.”
Reflecting Columbia’s 60 percent ownership stake, the joint venture will
be fully consolidated in Columbia Sportswear’s operating results and
financial position beginning with the first quarter of 2014, in
accordance with U.S. Generally Accepted Accounting Principles (GAAP).
The joint venture agreement carries an initial term of 20 years. In
addition to serving as joint venture partner in China, Swire Resources
will continue as Columbia’s independent distributor in Hong Kong and
Macau.
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. 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 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 Annual Report on Form 10-K
for the period ended December 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: 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.
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