The parent company of high-end outdoor brand Archaeopteryx, Yamafin Sports, is listed on the New York Stock Exchange.
On January 4th local time, the official website of the US Securities and Exchange Commission (SEC) showed that global sports and outdoor brand group Amer Sports, Inc. (hereinafter referred to as "Amazon Sports") has officially submitted F-1 documents. On the same day, Amazon Sports also announced on its official website that it has applied for common stock to be listed on the New York Stock Exchange, with the stock code "AS". The number and price range of shares to be issued have not yet been determined. In addition, Goldman Sachs Limited, Bank of America Securities, JPMorgan Chase and Morgan Stanley serve as joint underwriters.
Amer Sports Corporation, a wholly-owned subsidiary of the company, was established in Helsinki, Finland in 1950. It was previously listed on the Helsinki Stock Exchange in 1977 and delisted in 2019 after being acquired by an investment consortium led by ANTA Group.
According to the official website, Yamafen Sports is a global iconic sports and outdoor brand group with over 10800 employees worldwide, with business operations in 41 countries/regions and products sold to over 100 countries/regions. Yamafen Sports is mainly divided into three sub businesses: professional clothing, outdoor performance, and ball sports. Arc'teryx, a high-end outdoor equipment brand, Salomon, a French mountain outdoor off-road brand, and Wilson, an American tennis equipment brand, are the core brands in the three segmented markets mentioned above.
Yamafen's brand, sourced from the prospectus
Among them, Archaeopteryx has always been known as the "top outdoor trend", with an average clothing price of 4000 to 6000 yuan. Netizens jokingly refer to it as a "middle-class standard".
Archaeopteryx contributed 30% of revenue, but failed to turn losses after acquisition and transformation
According to the prospectus, Yamafin Sports was acquired by an investment consortium led by ANTA Group in 2019 and began its transformation. Since then, Yamafin Sports's performance has accelerated.
Specifically, from 2020 to 2022, the revenue of Yamafen Sports was 2.446 billion US dollars, 3.067 billion US dollars, and 3.549 billion US dollars, with a total revenue exceeding 9 billion US dollars. The year-on-year growth rate of revenue in 2021 and 2022 was 25.39% and 15.72%, respectively. The net losses were $237 million, $126 million, and $253 million respectively, totaling over $600 million.
The adjusted EBITDA was $311 million, $417 million, and $453 million, with year-on-year growth rates of 34.08% and 8.63% in 2021 and 2022, respectively. The gross profit margin is 47%, 49.1%, and 49.7%, respectively.
Yamafen's performance in the past four years, sourced from the prospectus
In addition, in the first three quarters of 2023, Yamafin Sports revenue increased from $2.4 billion to $3.1 billion, a year-on-year increase of 29.9%, gross profit margin increased from 49.4% to 52.2%, and net loss increased from $104.4 million to $113.9 million, a year-on-year increase of 9.1%; After adjustment, EBITDA increased from $261.8 million to $422.1 million, a year-on-year increase of 61.3%.
It is worth noting that the Archaeopteryx is not the largest revenue driver for Amafin.
The three core brands accounted for over 90% of their revenue in the first three quarters of last year. Among them, Archaeopteryx contributed a revenue of 941 million US dollars, a year-on-year increase of about 65%, accounting for over 30% of the total revenue; Salomon's revenue was 949 million US dollars, a year-on-year increase of about 35%, accounting for over 30% of the total revenue; Wilson's revenue was $866 million, a year-on-year increase of about 10%, accounting for nearly 30% of total revenue.
In terms of channel construction, Yamafen Sports adopts a vertically integrated DTC model (Direct To Customer marketing model) and utilizes wholesale relationship networks to establish its own retail distribution network around the world. Yamafen's revenue share in the DTC channel continues to increase, reaching 21.7%, 27.1%, 29.5%, and 32.8% from 2020 to 2022 and the first three quarters of 2023, respectively. In addition, the e-commerce business of all brands of Yamafen Sports increased by 88% from 2020 to 2022.
2019 was a watershed for the development of Yamafen Company. In 2019, an investor consortium consisting of Anta Sports, Fangyuan Capital, Anamed Investments, and Tencent successfully acquired Yamafin Sports for 4.6 billion euros, with plans to transform Yamafin's business model, invest in the brand, and expand overseas markets. According to the prospectus, the shareholders who currently hold more than 5% of the shares in Yamafen are still the aforementioned four companies.
Holding more than 5% of shares
Prior to the acquisition, Yamafen Sports operated with a matrix organizational structure, which limited the brand's growth potential. In 2019, after the acquisition, Amazon restructured and simplified the company structure, with each brand's leadership team responsible for developing their own brand strategy in three core departments and executing it end-to-end throughout the entire value chain. For example, Archaeopteryx maintains a consistent channel strategy with DTC, and the Salomon and Wilson brands, which have traditionally focused on wholesale, have also increased their influence in DTC channels while strengthening wholesale partnerships.
In addition to adjusting market strategies and channels, Yamafin also continues to slim down. Through evaluation and optimization of its product portfolio, it divested the cycling brand Mavic in 2019, the health equipment brand Precor in 2021, and the smartwatch brand Suunto in 2022. The prospectus introduces that the diversified brand portfolio enhances Yamafen's competitive advantage in the sports category.
Yamafin's performance in Greater China continues to rise, with Archaeopteryx contributing nearly 80% of revenue to the region
"We believe that as the Yamafen brand continues to be recognized by consumers in Greater China, we are in the early stages of seizing growth opportunities in the region," Yamafen Sports stated in its prospectus. After becoming a joint venture of ANTA Group, Yamafen Sports has continuously accelerated its brand penetration in Greater China, further driving the sustained growth of performance in the region.
Among them, the proportion of revenue from Yamafin Sports Greater China region to the global total revenue increased from 8.3% in 2020 to 14.8% in 2022, and increased to 19.4% in the first three quarters as of September 30, 2023. According to the prospectus, it is believed that with the continuous opening of retail stores and expansion of e-commerce platform channels by various brands, there is huge growth potential in the Greater China region.
During the 2019 acquisition, executives from ANTA Group pointed out that, "As a listed company in Europe, after the acquisition of ANTA Group, Yamafen's biggest synergies are still in China. Although all of its brands are very small in China, its brand genes are strong, and it also has unique technology and influence. Therefore, we believe that through ANTA's experience in brand management, we can make Yamafen's brand thrive in the Chinese market."
When other companies face challenges or business contractions, Amazon's business in Greater China has achieved significant growth. As of September 30, 2023, Yamafen has 63 Archaeopteryx self operated retail stores, 30 Salomon self operated retail stores, and a total of 67 Salomon distribution points (including self operated retail stores and partner stores) in Greater China, compared to 13 in 2019. For Wilson, Yamafen has recently become the exclusive distributor and licensor of basketball for the NBA, driving growth in performance in Greater China. In addition, the rapid popularity of winter sports in Greater China has also driven sales of winter equipment for Salomon and the Austrian skiing equipment brand Atomic.
"Overall, Yamafen has achieved success in the Greater China region." According to the prospectus, in terms of performance, Yamafen's revenue in the Greater China region increased from $202.3 million in 2020 to $523.8 million in 2022, with a compound annual growth rate of 60.9%, and the operating profit margin in the Greater China region exceeded the overall business profit margin. In 2023, revenue from the Greater China region continued to grow, with revenue of $593 million as of the first three quarters of 2023, a year-on-year increase of 67.6%.
Yamafen's regional performance in the first three quarters of last year, sourced from the prospectus
It is worth noting that the Greater China region is undoubtedly the largest market for Archaeopteryx. In the first three quarters of last year, Archaeopteryx Greater China achieved a revenue of 453 million US dollars, contributing nearly 80% of the total revenue of Greater China and accounting for over 40% of Archaeopteryx's global total revenue.
The regional market performance of Yamafen's core brand is sourced from the prospectus
Yamafen stated that the initial success in Greater China was largely related to the performance growth of the Archaeopteryx brand, and Yamafen also adopted the same strategy for the Salomon brand. From 2021 to 2022, the Salomon brand's revenue in Greater China increased by 72%.
In terms of senior management, Zheng Jie has been serving as the CEO of Yamafen since 2020 and will be appointed as a board member related to this issuance. Zheng Jie is considered a veteran of ANTA Group. He joined ANTA Sports in 2008 and served as the group's president and executive director before becoming CEO. He has also served as a director of ANTA Sports since 2009. Ding Shizhong, co-founder, chairman of the board, and executive director of Anta Sports, will be appointed as a board member related to this issuance.
Regarding the overall growth strategy for the future, Yamafen mentioned in its prospectus that it will further penetrate major markets and strategically expand the market. In the field of professional clothing, Archaeopteryx will build on its momentum in North America and Greater China and seek opportunities in Europe and other regions of the Asia Pacific region in the future. In the field of outdoor performance, Salomon is relatively well-known in Europe, but its brand awareness is significantly lower in Greater China and the United States, which also represents strong growth opportunities in these markets. In the field of ball sports, Wilson plans to expand its leadership position in the North American market while driving growth in Greater China and Europe.
It is worth noting that Anta Group and Yamafen Group have formed a "dual wheel drive" global strategic layout. Anta Group also mentioned at the Global Investor Conference in October 2023 that Yamafin Group will continue to strengthen its "three major markets" in China, North America, and Europe, promote five "1 billion euros" strategies, and establish a global leading position for its core brands in their respective sub sectors.
ANTA Group was founded in 1991 and went public in Hong Kong, China in 2007. In terms of the local market, the group deeply cultivates four major brands, including the Chinese professional sports brand ANTA, as well as three previously acquired high-end brands, namely the Italian high-end fashion and sports brand FILA, the Japanese high-end skiing professional sports brand DESCENTE, and the Korean high-end outdoor lifestyle brand KOLON.
For a long time, ANTA's acquisition of FILA has been seen as a textbook level acquisition case. From a loss making state during the acquisition in 2009 to a revenue of billions of yuan today, FILA has developed rapidly in the past two decades, and the revenue in the first half of last year even became half of ANTA Group's sky. Since being acquired by the group in 2019, the operating performance of the joint venture company Yamafen Group has exceeded expectations, especially with the Chinese market reaching a record high. Whether it can become the next "cash cow" of ANTA Group in the future has attracted market attention.