Recently, Archaeopteryx's newly launched "Year of the Dragon Limited" clothing has become popular again. According to a second-hand platform, the original price of 8,200 yuan Archaeopteryx "Year of the Dragon Limited" jacket has been fried to about 12,000 yuan.
Known as one of the "middle-class three-piece sets", Archaeopteryx is a gold-absorbing weapon for its parent company, Amalfen, in the Chinese market. Recently, Amalfen Sports officially submitted a prospectus and plans to be listed on the New York Stock Exchange. According to the prospectus, in the first three quarters of 2023, the company achieved revenue of $3.053 billion, gross profit margin of 52.2%, and a net loss of $114 million. In the first half of 2023, the overall gross profit margin of ANTA Sports was 63.3%.
Picture/Screenshot of Archaeopteryx's official Weibo video
The Archaeopteryx Year of the Dragon jacket was robbed
According to Zhongxin Jingwei, on New Year's Day, 46-year-old Mr. Xing came to the Arc'teryx store in Beijing's Wangfu Central early to line up to buy the "Year of the Dragon Limited". "I came at half past six, and it took me three and a half hours to get a set, which was not easy. ”
Mr. Xing said that the reason why he often buys Archaeopteryx is that there are many types of Arc'teryx and can meet the needs of travel and work. In recent years, Archaeopteryx has also seen a more than just middle-aged people. "Every time I go to the store, I see that there are young, middle-aged and elderly consumers. ”
"The store opened at 10 o'clock on the 1st, and the 'Year of the Dragon Limited' was sold out at 10 o'clock, and there was no replenishment later. You can take a look at the second-hand platform. The clerk of the Arc'teryx Wangfu Central store said that the "Year of the Dragon limited" models sold in the store, including jackets and T-shirts, have long been out of stock. On a second-hand platform, I saw that the original price of 8,200 yuan for the Archaeopteryx "Year of the Dragon Limited" jacket has been fried to about 12,000 yuan.
On the evening of January 10th, the topic # Archaeopteryx Year of the Dragon jacket was fried to 12,000 yuan # and rushed to the hot search. Someone commented, "I can't understand it at such a high level." Someone else questioned, "Is it really good-looking?"
Arc'teryx's parent company used the listing to pay off its debts
Although Arc'teryx has recently come out of the circle, many people are still surprised that it is a brand owned by Anta.
And just last week, Amer Sports, a non-wholly-owned subsidiary of Amer Sports Holding, a joint venture company of Anta Holdings, and the parent company of brands such as Arc'teryx, Salomon and Wilson, officially submitted a prospectus to the U.S. Securities and Exchange Commission for a non-U.S. domestic company, planning to list on the New York Stock Exchange under the ticker symbol "AS".
Source: Amalfen Sports official website
It is reported that the lead underwriters of the IPO are Goldman Sachs, Bank of America, JPMorgan Chase, Morgan Stanley, Citigroup and UBS, and more than ten investment banks such as CICC, HSBC and BNP Paribas will also participate in the issuance.
In December 2022, the media reported that Amalfen Sports' major shareholder, Anta Sports and a consortium of investors were considering listing it independently. In September last year, Amalfen Sports has secretly submitted documents for its initial listing in the United States, with a valuation of up to US$10 billion (about 70 billion yuan).
Archaeopteryx's parent company, Amalfen Sports, was founded in 1950 and is headquartered in Helsinki, Finland. Starting out in industry, it transformed into a sports business in 1974 and now operates a comprehensive sporting goods production and marketing portfolio with 11 brands sold in more than 100 countries and more than 10,000 employees worldwide.
In 2018, Anta announced that it would acquire the entire equity of Amalfen Sports in cash with a consortium formed by other investors, including Tencent, at a price of 40 euros per share, for a total of 4.6 billion euros (about 37.1 billion yuan). At the beginning of 2019, Ding Shizhong, chairman and CEO of Anta Group, said that this acquisition was the most important decision he had made since he started his business.
The largest acquisition in China's sporting goods industry was seen as a big gamble at the time. In the first three years of joining Anta, Amer Sports Holding was in a loss-making state, and it was not until 2022 that the company's revenue was US$3.55 billion, equivalent to 25 billion yuan, contributed a profit of 280 million yuan.
In terms of liabilities, Amalfen currently has total liabilities of US$8.138 billion, current liabilities of about US$1.435 billion, current assets of US$2.36 billion, and cash and equivalents of only US$284 million. The status quo coincides with the stated purpose of the IPO – to obtain financing to repay its debts.
Nearly 80% of Greater China's revenue comes from Arc'teryx
Although there is no money now, Amalfen is very profitable. According to its public prospectus data, the company's revenue increased by nearly 30% from $2.4 billion to $3.1 billion in the nine months ended September 30, 2023, and gross margin rose from 49.4% to 52.2%. Among them, Greater China contributed revenue of US$593 million to Amalfen, a year-on-year increase of about 67.6%.
Looking back from 2020 to the third quarter of 2023, the proportion of Greater China in Amalfen's business has increased year after year - from 8.3% to 19.4%. The company's overall revenue has also increased from $2.45 billion to $3.55 billion in three years, with a compound growth rate of 20.4%, higher than industry giants Nike and Adidas.
The Greater China market has become the focus of Arc'teryx and Amalfen Sports in recent years. As of September 2023, there are 63 Arc'teryx self-operated retail stores in Greater China, accounting for nearly half of its total global stores, and Arc'teryx's revenue in Greater China during the period was US$453 million (about 3.25 billion yuan), accounting for nearly half of the brand's global revenue and nearly 80% of Amalfen Sports' revenue in Greater China.
According to the prospectus, as of the end of September 2023, the number of employees in Amalfen Sports Greater China has almost doubled from about 450 in 2018 to 800, and the number of Arc'teryx members in Greater China has also increased from 14,000 in 2018 to more than 1.7 million in September 2023. In 2022, Amalfen Sports' revenue in Greater China reached US$524 million, doubling from US$202 million in 2020, and in the first three quarters of 2023, this figure continued to increase to US$593 million.
In order to continue to achieve growth, Amalfen Sports is focusing on direct sales channels. Over the past year, both Wilson and Arc'teryx have expanded their direct operations with new brick-and-mortar stores. As of September 30, 2023, Amalfen Sports had 138 Arc'teryx stores, 114 Salomon stores and 9 Wilson stores.
According to Credit Suisse's 2022 Global Wealth Report, the number of adults with global net worth of $100,000 or more increased from 358 million in 2010 to 689 million in 2021. There are more and more consumers who pursue high-end and high-performance, and the sports track that is closely related to health is also on the rise. For Amalfen Sports, if it can be successfully listed, it is not difficult to turn losses into profits.
Assist ANTA in globalization
The IPO announcement was issued, and many people ridiculed that this time "China Anta" really wants to become "International Anta".
In fact, this is not just a joke, after all, "single focus, multi-brand, globalization" has always been ANTA's business strategy. Judging from its recent developments, the acquisition of MAIA ACTIVE has formed a certain competitive trend with the international brand Lululemon, the English spelling of the original logo has been added to make it easier for global consumers to read the brand, and the establishment of the Southeast Asia International Business Department has established the world's first basketball franchise store in Paragon Singapore...... A series of adjustments are aimed at ANTA's international focus.
The acquisition of Amalfen in 2018 is the foreshadowing laid by ANTA for today. At the investor conference in October last year, Anta said that in the next three years, Amalfen will continue to strengthen the "three major markets" of China, North America and Europe, and promote the five "1 billion euros" strategy. At present, ANTA Group and Amalfen Group have formed a "two-wheel drive" global strategic layout.
From Amalfen, Anta has gotten more than just new brands that are out of the circle. With China's local brand building and operation capabilities, it is almost impossible for Archaeopteryx or Wilson, which are popular in Europe and the United States, to be born in a short period of time. The acquisition of Amalfen will help it learn from the experience of operating an international brand and promote its listing in the United States, and ANTA's main brand will also greatly benefit.
At the beginning of last year, in a series of personnel adjustments of ANTA, Xu Yang, General Manager of Arc'teryx Greater China, took over the main brand of ANTA, which is a recognition of his personal work ability and the significance of Arc'teryx to ANTA.
However, if you want to truly achieve globalization, not only a sub-brand, but also the entire enterprise and market must be globalized. In terms of corporate philosophy and talent structure, ANTA has been at the forefront of local enterprises. However, the globalization process of the main brand is still in its infancy.
Judging from Anta's 2022 performance report, the revenue data of its international business has not yet been released. Compared with the other two giants based on international business, Nike and Adidas have 18% and 10% of international business respectively.
Although the partnership with NBA superstar Irving has brought ANTA a stepping stone, the unfamiliar cultural environment will still bring many challenges to the Chinese brand, such as value recognition, brand awareness, multicultural collision and disparate consumer needs.
No matter how much Amalfen can only be assisted, Anta Group still has a long way to go if it wants to become a real "international ANTA".
Source丨21st Century Business Herald (Gao Jianghong), China-Singapore Jingwei
SFC
This issue is edited by Li Yutong
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