Columbia Sportswear Company plans to invest approximately $51 million capitalizing a new joint venture with its distributor for mainland China rather than let their agreement expire at the end of 2014.

The new company, Columbia Sportswear Commercial (Shanghai) Co. Ltd., will be a 60/40 joint venture between Columbia and Swire Resources Limited, which has held the exclusive rights to distribute Columbia brands in China since 2004. Samson Wong, the Swire Resources executive who has taken Columbia’s annual sales in China to $150 million, was named president of the new company, which will begin operations Jan. 1, 2014. The joint venture agreement provides an option for either party to buy control at the end of five years.


With Swire Resources agreement set to expire at the end of 2014, Columbia basically had three choices to make in China. It could renew the agreement, let it expire or step in to build a new organization from scratch, or combine resources with Swire Resources to take the brand further.



“Swire has done a great job establishing the brand and was motivated to stay involved at 40 percent rather than nothing,” said Ron Parham, a spokesman for Columbia. “We were motivated by the long-term opportunity, potential profitability and their deep market knowledge and operational capabilities.”


Parham said Columbia has not yet determined whether the joint venture will also assume distribution of its other brands, which include Montrail, Mountain Hardwear and Sorel.


Swire Resources’ Mainland China revenues attributable to its Columbia distributorship totaled over $150 million and generated low-double-digit EBITDA in 2012, selling through approximately 70 branded retail locations and to dealers who operate more than 680 mono- and multi-brand retail locations.  Swire Resource will retain its rights to Columbia in Hong Kong and Macau, while the joint venture will take over all its assets and operations in mainland China. The joint venture will initially employ approximately 700 staff, drawn primarily from the current Swire Resources team, which has grown Columbia to be the #1 outdoor brand in China, according to the 2012 China Outdoor & Fashion Sports Goods Retailing Report from ISPO China and The China National Commercial Informational Centre. The joint venture will be fully consolidated in Columbia Sportswear’s operating results, beginning in 2014.

Wong brings 29 years of experience with the Swire group, including the past 23 years with Swire Resources Limited, where he began in 1990 as financial controller and ascended to executive director in June 2012. He has led Swire Resources’ efforts as Columbia Sportswear’s exclusive distributor in Mainland China since 2004 and in Hong Kong/Macau since 2002.

“We believe Samson’s proven leadership and the continuity of the Swire team will be invaluable as we invest together and expand our relationship with a trusted business partner under the new joint venture structure,” said Columbia President and CEO Tim Boyle.

Swire Resources Ltd. is a subsidiary of Swire Pacific Limited, a publicly traded company with major holdings in airport, automotive, bottling, hospitality, real estate and maritime industries that generated revenues of $5.65 billion in 2012. Swire Resources will continue to distribute Aerosoles, Rockport, Speedo and Ugg in China, where it also operates 94 multi-brand stores under the Marathon Sports, GigaSports, Catalog, d2 and Actif banners.