Black Diamond, Inc. has signed a definitive agreement to acquire the Japanese distribution assets of Gregory Mountain Products from Kabushiki Kaisha A&F (“A&F”), the exclusive distributor for Gregory in Japan.
“The amicable acquisition of Gregory’s Japanese distribution provides a number of benefits, including better control of our products in Japan, specifically the existing Gregory technical and lifestyle pack business,” said Peter Metcalf, president and CEO of Black Diamond. “Similar to our internal distribution platform in Europe, controlling our own distribution in Japan is expected to allow Black Diamond to develop a robust platform to support and scale recent and potential future acquisitions in this important market.”
Beginning Jan. 1, 2013, Gregory intends to assume all of its own sales, marketing and distribution functions in Japan. Dating back to the early 1980’s, A&F has been responsible for Gregory’s sales, marketing and distribution functions in Japan, Gregory’s largest foreign market and an important strategic market for Black Diamond’s long-term growth objectives. A&F represented approximately 6 percent of the company’s consolidated 2011 sales.
“Gregory and A&F have been partners for many decades and as a result, this agreement is designed to be mutually beneficial to both Black Diamond and A&F,” continued Metcalf. “A&F currently is, and is expected to remain, Gregory’s largest retail partner in Japan through A&F’s owned retail stores. Working directly with Japanese retailers is expected to allow improved forecasting and production planning to better support our Gregory sales growth expectations and provide smoother, more predictable cash flows. Ultimately, we believe controlling our own distribution will continue to be a key source of strength and competitive advantage for Black Diamond. However, there are no plans at this time to alter the existing Black Diamond Equipment branded gear distribution structure that we have with our long-time Japanese partner, Lost Arrow, Inc.”