Columbia Sportswear Company Announces Intention to Acquire Remaining Interest in China Joint Venture from Swire Resources Limited

11-Apr-2018 Intellasia | BusinessWire | 9:00 AM Print This Post

PORTLAND, Ore.–(BUSINESS WIRE)–Columbia Sportswear Company (Nasdaq:COLM), a leading innovator in active
outdoor apparel, footwear, accessories and equipment, today announced
its intent to acquire the remaining 40 percent interest in Columbia
Sportswear Commercial (Shanghai) Company, the joint venture that it
currently operates in China with Swire Resources Limited, a subsidiary
of Swire Pacific Limited (SEHK:00019) (SEHK:00087). The acquisition is
subject to various conditions, including regulatory approval in China,
and is expected to be completed on or about January 1, 2019.

Tim Boyle, Columbia’s president and chief executive officer, said, ”We
thank Swire Resources for contributing to the success and growth of the
Columbia brand in China. They have been an exceptional partner for us
over the years and we look forward to continuing our strong relationship
in Hong Kong and Macau going forward. We are very pleased with the
performance of our joint venture since 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 existing brands”.

Richard Sell, Director, Trading and Industrial Division of Swire Pacific
Limited, said, “The strategic partnership between Columbia Sportswear
and Swire Resources in greater China has been a proven success over many
years. As the mainland China business embarks on its next phase of
growth, we wish Columbia every success. We look forward to continuing to
develop our Hong Kong and Macau business together and building our
partnership over the years ahead”.

The joint venture began operations on January 1, 2014 with headquarters
in Shanghai. Columbia Sportswear Company currently owns 60 percent of
the operation; Swire owns 40 percent, with profits and losses shared in
similar proportions. The joint venture had an initial term of 20 years
but included a provision for the purchase or sale of the minority
interest any time after the fifth year.

The joint venture’s 2017 sales in China totaled approximately $168
million, generating low-teens operating margin. Sales are on pace to
achieve high single-digit growth in 2018. Future plans include continued
investments in building the Columbia brand in China, as well as
expansion of direct and dealer-operated retail locations. We also intend
to maintain the existing management team, staff, dealers, and
distribution networks that have helped the Columbia brand flourish in
China.

Jason Zhu will continue as general manager of Columbia Sportswear
Commercial (Shanghai) Company.

As of December 31, 2017, the joint venture operated 86 retail store
locations in China. In addition, the joint venture sells its products
through brand-specific e-commerce websites in China across multiple
platforms and has distribution relationships with
approximately 50 wholesale dealers that operate approximately 750 retail
locations.

Reflecting Columbia’s 60 percent ownership stake, the joint venture has
been 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”).

Swire’s share of the net income of the joint venture is included in net
income attributable to non-controlling interest in Columbia’s
Consolidated Statements of Operations. The non-controlling equity
interest in the joint venture is presented separately in Columbia’s
Consolidated Balance Sheets and Consolidated Statements of Equity.

Swire’s share of the profit of the associated company is included in the
share of losses less profits of associated companies in Swire’s
consolidated statement of profit or loss. Swire’s share of the net
assets of the associated company is included under associated companies
in Swire’s consolidated statement of financial position.

Swire Resources will continue to serve as the exclusive independent
distributor of Columbia Sportswear in Hong Kong and Macau. Swire
Resources Limited had previously operated as Columbia Sportswear’s
exclusive independent distributor of Columbia branded products
in China from 2004 until the beginning of the joint venture.

About Columbia Sportswear Company

Columbia Sportswear Company has assembled a portfolio of brands for
active lives, making it a leader in the global active lifestyle apparel,
footwear, accessories, and equipment industry. Founded in 1938
in Portland, Oregon, the company’s brands are today sold in
approximately 90 countries. In addition to the Columbia® brand, Columbia
Sportswear Company also owns the Mountain Hardwear®, SOREL®, and prAna®
brands. To learn more, please visit the company’s websites at www.columbia.comwww.mountainhardwear.comwww.SOREL.com,
and www.prana.com.

About Swire Resources Limited

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, outdoor and
lifestyle footwear and apparel. The company’s five multi-brand chains,
Marathon Sports, Gigasports, Catalog, d2r, and Go Wild, are positioned
uniquely to serve a wide spectrum of sporting needs ranging from
hardcore performance, outdoor activities, casual athleisure to fashion
sports. Swire Resources operates over 210 retail outlets in Hong Kong,
Macau and Mainland China, consisting of brand concept stores for over 15
distributor brands, own operated multi-brand sports stores under the
five banners, as well as franchise stores of leading sports brands such
as Nike, Adidas and New Balance.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of
the federal securities laws, including statements regarding anticipated
results, profitability and growth. Forward-looking statements often use
words such as “will”, “anticipate”, “estimate”, “expect”, “should”, and
“may”, and other words and terms of similar meaning or reference future
dates. 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 and Quarterly Reports on Form 10-Q
under the heading “Risk Factors”, and those that have been or may be
described in other reports filed by the company, including reports on
Form 8-K.

Contacts

Investors:
Columbia Sportswear Company
Christian Buss,
503-985-4584
Director of Investor Relations
[email protected]
or
Media:
Columbia
Sportswear Public Relations
Andy Nordhoff, 503-985-1739
[email protected]
or
Swire
Pacific Limited
Cindy Cheung
Head of Group Public Affairs
852-2840
8091 (Office)
852-9038 8495 (Mobile)
[email protected]

 


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