Investment and Financing – The New Dynamics of the High-End Outdoor Market: HELLY HANSEN Changes Hands Amidst the Ongoing Outdoor Sports Boom

HELLY HANSEN Acquired: KONTOOR BRANDS Expands into the Outdoor Market

Recently, CTC, a Canadian retail group, officially announced the sale of its outdoor brand HELLY HANSEN to U.S. apparel retail giant KONTOOR BRANDS for $900 million. As the parent company of Lee and Wrangler denim brands, KONTOOR BRANDS' acquisition of HELLY HANSEN marks its official entry into the high-end outdoor market, opening up new growth opportunities for the brand’s future development.

Founded in 1877, HELLY HANSEN started with maritime apparel and later expanded into skiing, mountaineering, and other outdoor gear segments. With its superior waterproof technology and professional outdoor equipment, the brand has gained widespread recognition globally. CTC acquired HELLY HANSEN in 2018 for $775 million and is now selling it for $900 million six years later, reflecting the brand’s steadily increasing market value.

For KONTOOR BRANDS, this acquisition is not just about brand expansion but also a strategic shift

 As the growth of the traditional denim market slows down, the rising popularity of outdoor sports has driven KONTOOR BRANDS to leverage HELLY HANSEN’s outdoor expertise to explore new growth opportunities. Amid the evolving demands of young consumers, a brand portfolio that integrates fashion, functionality, and outdoor sports is set to become a major trend in the apparel market.

Global Outdoor Sports Boom: High-End Brands on the Rise

In recent years, the global outdoor sports market has been heating up, with high-end outdoor brands standing out as key growth drivers. Premium brands like Arc'teryx, Patagonia, and Mammut, despite their higher price points, continue to be in high demand.

Market research indicates that China's outdoor market is expected to surpass 100 billion yuan ($14 billion) by 2025

Notably, female consumers are increasingly receptive to high-end outdoor brands, more young people are embracing outdoor activities as a new form of social engagement, and the rising popularity of winter sports is further driving market growth.

According to the 2024 Fall/Winter Sports and Outdoor Industry Trend White Paper:

• The high-end market for shell jackets has seen significant growth, with the number of buyers in the 1,000-1,500 yuan ($140-$210) price range increasing by over 100% year-over-year.

• Sales of premium sports down jackets have surged, with buyers in the 2,000-yuan ($280) and above price range growing by more than 60% year-over-year.

• The demand for high-end sports shoes remains strong, with purchases of sneakers priced at 800 yuan ($110) and above experiencing a particularly sharp increase, especially among consumers aged 18-29, whose numbers have doubled.

  
  

These figures suggest that demand for high-end outdoor gear is experiencing explosive growth, with the growth dividend of traditional sportswear brands gradually shifting toward the high-end outdoor sector.

New Opportunities in the Chinese Market: Youngor and New Shareholders Accelerate Expansion

The acquisition will not impact HELLY HANSEN's operations in China. In 2021, Youngor Group and CTC jointly established HELLY HANSEN China, responsible for the brand’s domestic market operations.

Youngor has stated that it will collaborate with its new shareholder, KONTOOR

BRANDS, to accelerate HELLY HANSEN's growth in the Chinese market while maintaining its long-term commitment and support for the joint venture. With fresh capital backing, HELLY HANSEN is expected to adopt a more aggressive expansion strategy in China, including:

• Accelerating offline store expansion into more prime commercial areas and high-end shopping malls.

• Enhancing localized marketing to attract younger consumers and increase brand awareness.

• Strengthening e-commerce and social media engagement through platforms like Tmall, JD.com, and Xiaohongshu to reach target consumers.

  
  

As China’s outdoor sports market continues to expand, HELLY HANSEN, with the support of its new shareholders, will aim for a greater market share while competing with brands like Arc'teryx and Patagonia.

A New Battleground for Traditional Sports Giants: Why the Outdoor Market is So Attractive

In 2024, luxury market growth slowed, and traditional sportswear brands like Nike and Adidas faced challenges in sales growth. In contrast, high-end outdoor brands have been thriving, emerging as a dark horse in the apparel industry.

Q3 2024 financial reports from major outdoor brands reveal:

• Amer Sports (parent company of Arc'teryx, Salomon, etc.) reported a 17% year-over-year increase in global revenue, reaching $1.354 billion. The Greater China region recorded an astounding 56% growth, making it the strongest-performing market for four consecutive quarters.

• Arc'teryx stood out, being Amer Sports’ largest and fastest-growing brand. Its store expansion in China is progressing steadily, and its pricing power remains exceptionally strong.

• Salomon, once a niche outdoor brand, has evolved into a mainstream outdoor fashion footwear brand, rapidly increasing its store presence and significantly boosting market recognition.

  
  

These trends indicate that the outdoor sports sector is becoming a new growth driver for traditional sports brands. Many are shifting toward the high-end outdoor segment, launching more professional product lines to attract consumers willing to pay a premium for quality and branding.

KONTOOR BRANDS’ acquisition of HELLY HANSEN aligns with this trend, as the company seeks to optimize its brand portfolio and strengthen its position in the high-end market.

The Future of the Outdoor Market: Social Engagement and Functionality at the Core

Outdoor sports are no longer just physical activities but are increasingly evolving into a new form of social engagement and lifestyle.

More young people are choosing outdoor activities such as camping, hiking, skiing, and cycling as social and recreational experiences. The "outdoor + social" consumption model is gaining traction, and brands are investing heavily in community-driven marketing to attract target consumers. For instance:

• Arc'teryx launched "BIRD ACADEMY" offline experience events, allowing consumers to engage with outdoor activities firsthand and deepen their brand loyalty.

• Patagonia emphasizes sustainability, attracting consumers through its eco-friendly materials and environmental initiatives.

• Salomon collaborates with fashion brands, reinforcing its trend-driven identity and boosting brand influence.

  
  

For HELLY HANSEN to establish itself in the high-end outdoor market, it must align with these trends, focusing on product innovation, social engagement strategies, and enhancing consumer experiences.

Intensifying Competition: How Can Brands Stand Out?

HELLY HANSEN’s change in ownership is not just a financial transaction—it reflects the immense potential of the outdoor sports market.

With KONTOOR BRANDS entering the high-end outdoor sector, the brand is likely to undergo significant transformation, including repositioning, channel expansion, and other strategic adjustments. For Youngor, the new investment partnership signals the potential for accelerated growth in the Chinese market.

As competition intensifies, the key to success will lie in differentiation strategies, enhanced consumer experiences, and social-driven marketing. Whether HELLY HANSEN or its competitors can truly capture the high-end outdoor market’s potential remains to be seen.