The Gorpcore Empire behind Solomon and Arc’teryx

Tyler Jordan recently moved to Vancouver in the fall of 1993 and was looking for a job when he accidentally stumbled upon a mysterious handwritten job advertisement at his local climbing gym: “.

After putting the matter off for a week, the biology graduate and avid climber called the number. He spoke to Jeremy Guard, co-founder of a small four-year-old climbing belt company called Arc’teryx.

The following Monday, Jordan was hired.

“I had an administrator title, which meant I basically did whatever Jeremy told me to do,” Jordan said. “There were about a dozen of us crammed into a tiny office space – from there the game started, the rest is history.”

Jordan eventually became CEO in 2005. By then Arc’teryx had become a popular brand for cutting-edge mountaineering equipment. In the same year, it was bought by Amer Sports – a Finnish holding company that leads many outdoor and sports brands, including tennis racket and basketball manufacturer Wilson – as a reflection of Amer’s bid to acquire French ski and trail footwear company Salomon. , which was the parent company of Arc’teryx.

When Jordan stepped down in 2012, the Canadian brand was approaching $200 million in annual revenue. Then, in the second half of 2010, it saw an increase in interest and sales among fashion consumers, becoming a sought-after collaborator and poster brand for the gorpcore trend where outdoor apparel such as technical jackets and hiking boots became stylish everyday items.

Following the acquisition of Amer Sports by a consortium led by Chinese sportswear giant Anta in 2019, the new owner has outlined an ambitious growth plan.

The goal for each of the three brands is to reach €1 billion ($1.1 billion) in annual sales, and for the group to reach €5 billion in total revenue, up from €3.4 million in 2022, according to a March Ant report. He did not specify a time frame, but said he was “making steady progress”.

Seeking to capitalize on this momentum, Anta and her co-investors held preliminary talks with investment banks in December to explore an Amer Sports IPO that could raise as much as $1 billion, according to a Bloomberg report.

Anta overhauled Amer Sports’ centralized approach to handling the wallet, instead allowing each brand to be more autonomous. The retailer also wants to bolster the brand’s apparel range and move away from wholesale to prioritize direct-to-consumer sales.

While trends like gorpcore will inevitably rise and fall, the demand for sportswear has been fueled by permanent post-pandemic lifestyle changes, and brands like Arc’teryx and Salomon are particularly well placed to succeed. For example, Arc’teryx has been embraced by unexpected consumer groups, and its vests and shell jackets have become the uniform of the Silicon Valley tech-brother crowd (the brand even opened a store there in 2021).

“Not all brands will survive the end of the gorpcore cycle, but companies like Arc’teryx and Salomon have never embraced it or adapted their core products,” said Sportswear and Menswear journalist Clayton Chambers. “Rather, [they’ve positioned] their companies more as luxury offerings, both in terms of price and cooperation.

A deal that almost didn’t happen

By 2000, Arc’teryx had expanded into apparel and had grown significantly – with revenues of C$30 million ($22 million) that year – and was acquired in 2002 by a joint Adidas-Salomon group.

Three years later, Adidas sold Salomon – along with its Arc’teryx subsidiary – for €485 million ($537 million) to Amer Sports. Adidas focused solely on ball sports, and Amer wanted to build a list of leading sports equipment companies. Its portfolio also includes Swedish outerwear brand Peak Performance, ski equipment specialists Atomic and Armada, as well as Louisville Slugger, a 140-year-old baseball bat manufacturer.

But according to Jordan, Arc’teryx almost didn’t come to an agreement on the deal.

“When Amer took over Salomon, they didn’t know much about Arc’teryx – they were only interested in sports equipment companies and definitely had no interest in apparel or soft goods at that time,” BoF said.

After another decade of rapid growth for both brands, Amer Sports was acquired in late 2018 for $5.2 billion by a consortium of buyers led by Anta Sports, China’s largest sportswear company, as well as Tencent, the private equity firm of Fountain Vest Partners and founder of Lululemon Chip Wilson.

Plan Anti

Scaling Amer’s operations first required a review of its previous centralized approach, where brand leaders spent more time working with Amer and its management than day-to-day decisions about their brands, Jordan said. The new ownership brought a new roster of directors, installing Ant’s then-president Jie Zheng as Amer’s chief executive officer. Zheng then hired former Lululemon executive Stuart Haselden to lead Arc’teryx, and Franco Fogliato, a Columbia and VF Corp. graduate, to lead Salomon.

Two main goals were set for them: to increase the share of direct sales to the consumer and to join the favorable fashion cycle by expanding the clothing offer.

“When the new shareholders came on board in 2019, they made a number of changes to the brand’s direct-to-consumer focus that work very well in terms of enabling the brand to be more independent and agile,” Fogliato said.

For example, Arcteryx is reducing its wholesale exposure from 66 percent of sales in 2019 to 25 percent by the end of 2023. Retail expansion has also been “an extremely important part of the strategy, with the brand expanding its global network of 120 stores with new locations in North America and Asia over last two years and then in Europe, Haselden said.

According to Amer’s chief financial officer, Andrew Page, Anta’s changes have produced promising results. He said Amer’s €3.4 billion revenue in 2022 represented a 22 percent increase over the previous year. EBITDA also rose 8.8 percent to RMB 2.58 billion (US$373 million) over the same period, according to Ant’s annual report.

Conquering fashion

All three brands invest in introducing fashionable clothing that shares the same technical credentials as their sports products.

For Arc’teryx, the key is to increase apparel sales without diluting key products such as Gore-Tex parkas, thermal baselayers and hiking pants. To this end, the brand has launched a sub-label called Veilance, a collection of fashionable, minimalist pieces, including puffer jackets, wool blazers and trousers, as well as accessories such as hats and backpacks.

Commitment to clothing may require the greatest effort from Wilson, which has focused on sports equipment, not sportswear, for decades. According to Amanda Lamb, Vice President of Wilson, apparel is now a small segment of the business, including tennis tops, shirts and tracksuits. But the brand has started introducing more non-functional clothing, like a $150 college basketball jacket. She also continues high-profile fashion collaborations such as a clothing pod with Kith, as well as a Louis Vuitton basketball she created with the late Virgil Abloh for the 2021 NBA Finals.

Wilson wants to expand its retail reach by opening new stores in the US and China, including a flagship store in New York City and an outlet on the Santa Monica boardwalk that opened last weekend.

At Salomon, Fogliato’s key goal is to make the brand’s apparel “more premium”, he said. The brand’s sports-themed product range – including the ubiquitous XT-6 – is one of the fastest-growing categories, boosted by an endless list of celebrities and collaborations with luxury and street gamers.

For Fogliato, Salomon’s progress under new ownership Amer was perfectly demonstrated in February when Rihanna performed at halftime of the Super Bowl wearing the MM6 Maison Margiela x Salomon Cross Low. Earlier in the day, several Salomon athletes wearing Salomon gear won gold medals at the Cross-Country and Biathlon World Cup – the same sport for which Salomon designed gear when it started in 1947 as a family-owned company in the French Alps.

“I don’t think there are many brands in the world that can have that credibility in both fashion and competitive sports at the same time,” said Fogliato.