In the 2023 Forbes Global Billionaires List released last year, the Ding Shizhong family became the richest person in Xiamen, China, China, with a net worth of US$7.9 billion. At the beginning of 2024, with the listing of Amer Sports, the wealth of the Ding Shizhong family may exceed 10 billion US dollars.
Amer Sports brands include Wilson, Salomon, Arc'Teryx and Atomic winter gear, among othersNet sales jumped from $2.9 billion in 2021 to $3.7 billion in 2022, an increase of more than 30%, and there are more possibilities in the future.
As the first Chinese company to go public in the U.S. in 2024, Amer Sports plans to raise more than $1 billion through an IPO. According to Forbes' report last year on rumors of an Amer Sports IPO, the company could be valued at $10 billion. At the end of 2018, the acquisition consideration of Anta Group was 46600 million euros. If it gains a foothold in the U.S. at a $10 billion valuation, Amer Sports will be the most successful M&A deal in the past four years amid the pandemic and market uncertainty.
The winner of this growth game
At the end of 2018, ANTA, together with FountainBre Capital, Tencent and other institutions, launched the acquisition of Amer Sports. Anamered Investments, an investment firm owned by Lululemon founder Chip Wilson, is also involved. In the end, Anta Group won with 46Completion of the acquisition of 600 million euros**.
Chip Wilson, who spoke to Forbes last month, said he spent nearly $1 billion to buy about 21 percent of Amer, and a few months later paid another $100 million to buy Anta6% of the shares.
Although Wilson doesn't have any official titles at Anta or Amer (and he doesn't sit on the boards of either company), the billionaire describes Amer as his main focus: "Probably 90% of my time and mind is spent there. He also said that over the past few years, he has been a behind-the-scenes advisor to Amer's nine outdoor brands, including ski brand Atomic and shoemaker Salomon. His work focused on transforming them from a "very masculine, very engineered, very wholesale" image to a more appealing to everyday users, especially women. In other words, borrowing from lululemon's original approach. He said he's been focused on building a retail footprint for these typically winter-focused brands, including expanding into the spring/summer collection, "so that a store can be open 360 degrees all year round." β
As the main controller of the acquisition, Anta Group holds more than 50% of the equity of Amer Sports. For Ding Shizhong, Chairman of the Board of Directors of ANTA Group, this is a milestone event in the outbound M&A of China's sportswear industry, and the acquisition amount can be regarded as the largest overseas M&A of a Chinese enterprise in 2018. In an internal letter to employees, Ding Shizhong wrote: "This is the most important decision I have made since I started my business. β
Compared with the previous acquisition of FILA for HK$600 million, for Anta, the acquisition of Amer Sports is tantamount to a big gamble. Anta's 2018 financial report shows that the amount of the acquisition of Amer Sports is almost the same as the group's total annual revenue in 2018. The deal also left Anta heavily indebted, so it was described as a "snake swallowing an elephant" acquisition.
Pursuing a "multi-brand" strategy, ANTA Group, which has always been known for its "buying, buying, buying", relied on the group's advantages in the first chain, channels, R&D and retail operations to help Amer Sports overtake its performance after the acquisition of Amer Sports.
The data shows that Amer Sports grew by 4% and 7% in 2017 and 2018, respectively. From 2020 to 2022, Amer Sports' revenue was 24$4.6 billion, $30$6.7 billion and $35$4.9 billion, with a CAGR of 204%γIn the first nine months of 2023, Amer Sports' revenue increased by 30%, and the "Latest Operating Performance for the Fourth Quarter and Full Year of 2023" released by ANTA Group on January 5 showed that for the whole year of 2023, the retail value of the Group's other brand products (in terms of retail value) recorded a positive growth of 60-65% compared with 2022.
Circle Breaking and Completion
Founded in Finland in 1950, Amer Sports started as a tobacco** company and grew into a multinational company dedicated to the production and marketing of sporting goods, and was listed on the Helsinki ** exchange on the NASDAQ Nordic market in 1977. Its many sports brands, including the Canadian outdoor equipment brand Arc'teryx, the French mountain outdoor off-road brand Salomon (Salomon), the American tennis equipment brand Wilson (Wilson), etc., are mainly aimed at the mid-to-high-end market, which is comparable to the "old money" of sports brands.
After the completion of the acquisition, the operational focus of Amer Sports has changed, and the strategy of ANTA Group has also changedBut in the end, the two achieve an efficient adaptation.
According to Xu Yang, who was interviewed by Forbes China at the beginning of last year, Anta Group's acquisition of Finnish sports giant Amalfen Group is an excellent case of Chinese enterprise globalization. Xu Yang served as the general manager of Amalfen's Arc'teryx Greater China, and then returned to Anta's main brand as CEO in October last year.
The acquisition was completed in 2019 and Amalfen Group continues to manage its core brands with an international team. In team management and day-to-day operations, ANTA fully respects the right of Amalfen Group to retain the dominance of European and American cultures, and retains its existing advantages in international talents. Over the past three years, Amalfen Group has also achieved rapid growth under the inspiration and strategic guidance of ANTA Group, and the advantages of the two groups have formed a strong complementary.
First, Anta has reformed the centralized way in which Amer Sports operates its product portfolio, shifting to make each brand more autonomous. As of September 30, 2023, Amer Sports had 63 Arc'teryx-owned retail stores in Greater China, accounting for nearly half of the total number of stores worldwideIt has 30 Salomon self-operated retail stores and 67 distribution stores, up from 13 in 2019. At the beginning of 2023, ANTA Group ushered in its biggest personnel change, with Amer Sports becoming independent from the outdoor sports brand group.
Secondly, in terms of brand marketing, Amer Sports has successfully broken the circle in the local area. Taking Archaeopteryx as an example, in September 2020, Arc'teryx Alpha Center, the world's largest Arc'teryx Alpha Center, opened in Shanghai, located in the ** section of Huaihai Middle Road, Shanghai. On the eve of the "Eleventh" holiday in 2022, the first Archaeopteryx *** in Wangfujing, Beijing, opened.
Taking advantage of the outdoor function in the past two years, the Archaeopteryx jacket has become a smash hit on social networks as the "middle-aged three treasures" and "outdoor standard", and young people are happy to bask in their Salomon off-road shoes.
Among the five "1 billion euro development plans" created by ANTA, the three major brands of Amer Sports, Arc'teryx, Salomon and Wilson occupy three seats. Anta expects to build it into a "1 billion euro" brand by 2025, with revenue of 1 billion euros in the Chinese market and 1 billion euros in the direct sales model.
Industry insiders said that the rise of domestic products basically relies on two paths, one is to acquire international brands and occupy the high-end market with international brands;The other is the high-end of the main brand. The differentiation between AMER Sports and ANTA Group's brand matrix has made up for the gap in ANTA's layout of high-end brands, and ANTA has shown us a vivid example with AMER SPORTS.
There is another interesting point about the corporate culture of ANTA Group. Even at the head of the world's sports brands, ANTA is not afraid to mention the brand's original "cultural origins". "Jinjiang small workshop has become an international brand, and ANTA itself is a history of struggle of Chinese enterprises. Xu Yang, CEO of Anta, said.
Can Amer Sports help "ANTA World"?
Nike, a bellwether for the global economy, issued a warning signal on December 21, 2023, to cut costs by $2 billion.
In recent years, ANTA Group has firmly held the top spot in China's sports footwear and apparel market. However, as the market and consumers become more cautious, ANTA, which is also a sports brand, is also thinking about how to dress for the winter. In addition to ANTA's main brand and FILA, AMER Sports represents the third growth curve, which can provide more room for the upgrading and transformation of the main brand ANTA and the adjustment of FILA's pace, as a new force to help "China ANTA" become "ANTA of the world".
In 2021, Ding Shizhong, then Chairman and CEO of ANTA Group, unveiled the Group's new 10-year plan at the celebration of ANTA's 30th anniversary: upgrading from "single focus, multi-brand, and omni-channel" to "single-focus, multi-brand, and globalization".
The addition of the niche and high-end Amer Sports to the Anta Group is considered by the outside world to be the most obvious move in Anta's "global" layout. "Globalization is the way to go, which means the improvement of ANTA's brand tonality and the benchmarking of higher standards, as well as ANTA's own cultural challenges and opportunities. Xu Yang, general manager of Primordial Ancestral Bird Greater China, and Xu Yang, the current CEO of Anta, once said in an interview with Forbes China.
According to the data, Amer Sports' revenue in the first nine months of 2023 increased by 30% to $3.1 billion, and more than 19% of the company's sales came from Greater China, most of which came from the United States and Europe. At present, Anta and Amer Sport have two different domestic and international market operation systems, and the separation and listing of Amer Sports will have more complementary effects on Anta.
As early as the financial report for the first half of 2022, Amer Sports has been included in Anta's "globalization" strategy to leverage a new growth engine. Relying on the successful localization of Amer Sports to complete the dislocation competition is a move that Anta Group may envision. It is undeniable that the IPO of Amer Sports will promote the globalization of Anta Group, but it remains to be seen how to rely on "foreign monks" to leverage the international market.
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