Columbia Sportswear continues to log double-digit gains in both net income and sales in the second quarter despite continued declined in the company’s Outerwear business. COLM looks to right the Outwear ship as it moves its Sportswear chief over to handle the Outerwear business as well.

On a currency-neutral basis, total sales for the company increased 10.1% for the quarter, driven by growth in Sportswear and Footwear. The company said FX rate benefits, a lower mix of International and distributor sales and higher gross margins on sales of closeout product helped improve overall gross margins, but were offset somewhat by a “continued mix shift” to lower margin Sportswear and Footwear product. The drop in Outerwear sales in the quarter, which is the company’s smallest shipping quarter for the category, was attributed primarily to weakness in the Youth Outerwear category.

Mountain Hardwear sales increased 7.6% to $6.8 million versus $6.3 million in second quarter last year. COLM said they still intend to grow the brand through “increased penetration of existing customers” and opening new customers in the current channel.

The company on Thursday announced the formation of a new European subsidiary based in Thalwil, Switzerland that will handle the sales, marketing and distribution of Mountain Hardwear products in Germany, Austria, France, Italy, Belgium, Netherlands and Luxembourg. The unit is expected to operate independently in Europe, but will utilize many of the facilities and infrastructure that has been established by Columbia.

Mountain Hardwear has been developing products in several categories for exclusive distribution in Europe. “With the increased involvement of our European sales agencies and distributors over the last several years, the line as a whole has been greatly influenced by their needs and tastes,” said Mike Wallenfels, MH’s VP of Sales and Marketing. “The outdoor market is becoming more of a global market than ever before.”

All current MH sales agencies will remain in place with the exception of Klett Sports in Germany and Austria. The remaining distributors, Bradshaw Taylor, which is responsible for the brand in the U.K., Spain, Portugal, Andorra and Scandinavia; and New Rock SA, which distributes the brand in Switzerland – will now be supported and managed by Mountain Hardwear GmbH.
Sorel sales increased 20.9% in the quarter to $1.5 million. The company said they were making efforts to make the brand more relevant on a year-round basis.

In the U.S., Columbia said the strong increase in sales was attributed to strong demand for key Sportswear styles. Footwear also reportedly saw solid sell-through, resulting in inventories at retail that were said to be in “good shape”.

Canada sales increased 7.9% on a currency-neutral basis, impacted by weather that was cooler and wetter than normal. The weather hurt Sportswear and Footwear sales, but COLM said they were disappointed by Outerwear sales given the weather conditions.

Europe saw Q2 sales increase 9.9% on a currency-neutral basis, which the company said was also hampered by cool, wet weather and difficult economic conditions in some key markets. The market reportedly saw a highly promotional retail environment in spring due to poor sell-throughs. Still, the company said sales were up in every category, driven primarily by Sportswear and Footwear. COLM still sees Europe as the most important growth opportunity among the International markets.

In the Other International segment, currency-neutral sales declined 10% for the period, due in large part to a 22.6% decrease in sales to international distributors. Japan saw a 5.9% increase in sales for the quarter on a currency-neutral basis, or 15.4% in local currency terms, to $7.5 million.

The company announced that Mark Sandquist, who had been responsible for the company’s Sportswear business, will now take on Outerwear as well. The company hopes to see better opportunities for synergies between the product categories. Doug Prentice, who had been running the Outerwear business, has moved over to work on Outerwear integration efforts for the company’s Sorel and Mountain Hardwear brands.