When Amer Sports announced it was filing to go public in the U.S. on Thursday, the parent company of Arc’teryx reported that revenue for the premium outdoor brand was $941.2 million in the nine months ended Sept. 30, compared with $569.4 million a year earlier.
That’s a 65% revenue increase year-over-year, with substantial growth recorded in every region.
The brand is a leader in the outdoor premium outerwear and apparel space and has grown its footwear line. Its hardshell jacket is a top seller.
Amer Sports also said in its SEC filing that expansion in the Greater China region has been one of several factors in the success of Arc’teryx.
Function and Fashion
Veteran outdoor industry analyst Matt Powell attributed the Arc’teryx revenue jump to the broader consumer trend of wearing outdoor apparel for more than just outdoor pursuits.
“This is another one of those brands that really has mastered the fashion side with the functional side,” he said.
While their products “perform at a really high level,” Powell added that many people wear Arc’teryx for the logo.
“That’s where the magic is,” he said. “That’s where the money is. In this industry, if you can make a credible, functional product that is accepted by the fashion consumer you couldn’t be in a better spot.”
One concern among outdoor consumers is that as a brand grows, its quality can become watered down, but Powell hasn’t seen any evidence of that with Arc’teryx.
“Every brand has to protect its core,” Powell said.
However, there is a trend among outdoor specialty retailers to lose interest in brands as they become larger, he added. Those retailers are looking to be the exclusive outlet for brands.
“Specialty retailers are saying, ‘I’ve got to find some brands that are more focused on me, and brands that the consumer will come to me for so I can maintain my point of differentiation,’” Powell said. “That’s the curse of specialty business. As brands get bigger, the specialty retailers start to lose interest.”
Product and Innovation Highlights
Amer Sports owns 138 Arc’teryx-owned retail stores across the globe.
The brand’s Alpha SV waterproof breathable hardshell jacket is one of its top selling products.
Along with growth in the core outdoor category, Arc’teryx is focusing more on its women’s category, where it has invested in new design leadership and has expanded its assortment, color palette, and fits. The brand has also increased its engagement with female athletes to further gain market share with female consumers.
For new product development, Arc’teryx recently opened a footwear development office in Portland, Oregon to provide a more comprehensive offering to the outdoor consumer, while also expanding its product line.
Arc’teryx is also diversifying its product portfolio through its contemporary urban lifestyle line, Veilance.
Designers for Arc’teryx are developing new Gore-Tex membranes in jackets and shoes that improve the waterproofing and breathability as well, according to Amer Sports.
Global Strategy
Despite the success of Arc’teryx and its loyal following, Amer Sports views the brand as having low global brand awareness when compared to more established premium outerwear brands.
To raise that awareness, it plans to host global events and expand its retail presence.
Arc’teryx’s geographic growth is grounded in its momentum in North America and Greater China, with opportunity in Europe and the rest of the Asia Pacific region, according to Amer Sports.
In the EMEA region, revenue was $110.2 million for the nine months ended Sept. 30, up 55% from the prior-year period.
In the Americas, revenue was $295.2 for the nine months ended Sept. 30, up 73%.
In Greater China, revenue was $452.6 million for the nine months ended Sept. 30, up 62%.
In the Asia Pacific region, revenue was $83.3 million for the nine months ended Sept. 30, up 75%.
In North America and Greater China, the brand operated 48 and 63 owned retail stores, respectively, as of Sept. 30. Seven of the stores in North America and 21 in China are factory outlets.
Since 2019, the brand has opened 31 stores in Greater China, as well as 17 stores in North America, including nine new stores as of Sept. 30, 2023, with plans to open three more by the end of 2024.
Globally, the Arc’teryx brand stores had an average sales per square foot of approximately $1,474 for the 12 months ended Sept. 30. Brand stores generally have been profitable with a target payback period of 24 months, according to Amer Sports.
“As a group, we deploy a vertically integrated, DTC mindset, while leveraging our network of strong wholesale relationships,” the company said in its filing. “We are increasingly emphasizing our owned e-commerce and building out our owned retail distribution around the world.”
Bart Schaneman can be reached at bart@ordaily.outdoorretailer.com.
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