K-Swiss Global Brands (KSGB), which is owned by Korea-based conglomerate E.Land, acquired One-Distribution, a leading skate-inspired apparel and footwear manufacturer and parent company of KR3W Denim Co. (KR3W) and Supra Footwear (Supra). Terms were not disclosed.
KSGB acquired the Fountain Valley, CA-based firm from a group of shareholders, including Bertram Capital, a San Matteo, CA-based private equity firm and a small group of private investors, including One-Distribution founders Angel Cabada and Scott Bailey. Both Cabada and Bailey will continue to support the brands in a consulting capacity.
In an interview with Sports Executive Weekly, Remington said the reason the acquisitions of KR3W (pronounced “crew”) and Supra made sense is because KSGB doesn’t have a skate business inside its portfolio. It’s other brands include K-Swiss, which is a heritage tennis brand; the Palladium boot brand; PLDM, a French-based fashion brand; and OTZ Shoes, a contemporary comfort footwear brand.
“There’s no cannibalization with the other brands in our portfolio,” said Remington.
“Having formed KSGB just two years ago, we are on an aggressive track to become one of the world’s leading multi-brand companies,” added Remington. “KR3W and Supra are brands that meet the distinctions we are looking for in our portfolio: authenticity, strong brand awareness, a track record of product innovation and opportunities for long-term, global growth. We are excited to join forces with the ONE-Distribution teams and lay a foundation for the future.”
Concurrently, KSGB appointed Robert “Cape” Capener as the brand president of both Supra and KR3W. Capener founded the both the Above the Rim and Heaton brands, and has held senior positions at Adidas, Reebok and No Fear. He was most recently at Sequential Brands.
“Cape is a bit of an entrepreneur, has had success growing major brands, and has both an action sport and apparel background,” said Remington. “He really fits in nicely.”
Barney Waters, KSGB’s chief marketing officer, will help provide direction for the acquired brands.
Founded in 2006, Supra has quickly become one of largest independent sneaker brands in the skate industry. Famous for its game-changing Skytop shoe, Supra has evolved as a globally relevant lifestyle brand. Influential celebrities such as Justin Bieber and Lil Wayne have been seen in the brand’s shoes, with Bieber collaborating on his own line, Spectre by Supra.
“The signature Skytop shoe broke the mold in terms of fashion and really put them on the map,” said Remington of Supra. “But they’ve been able to expand beyond skate over the last 18 months and really make some nice headway towards becoming a lifestyle footwear brand while keeping their authentic roots in skate culture.”
Started in 2003. KR3W is an apparel brand also with a foundation in skate culture. The brand made its name in denim for young men and is best known for its introduction of the K Slim Denim Jean using an innovative stretch fabric and a narrow profile.
“The narrow fit, stretch K Slim Denim Jean they first became known for is still quite fashionable today,” said Remington. “But like Supra, they’ve expanded beyond their roots and now have a full fashion apparel range with woven and knit shirts, shorts, socks, headwear and jackets. They’ve been able to make the transition and blur the lines between skate and fashion while maintaining their ‘Dark Americana’ aesthetic.”
Remington acknowledged that the action sports sector “has been troubled for quite some time.” But he said both brands are well positioned to find growth in the much broader fashion channels. He said, “They both kept looking forward and never got stuck in any particular place that would hurt the brand. So they’ve evolved very, very nicely and I think that although action sports might be struggling, we’ve got a clear path for success.”
The KSGB and One-Distribution leadership teams will work quickly over the following weeks to develop integrated plans for the company and its newest entities. As with the acquisition of OTZ Shoes in 2013 and the initial folding of K-Swiss Inc., which included K-Swiss, Palladium and PLDM, into E.Land in in the same year, back-office functions such as human resources, IT and finance will be shared among brands. But marketing and product design will continue to work separately with both KR3W and Supra “so they maintain their own personality,” said Remington.
Regarding growth, Remington said Asia particularly presents an opportunity for both brands, with the success K-Swiss has had in the region but particularly with the help of E-Land Group, a $10 billion group of companies with over 200 brands, 10,000 retail stores and business across apparel, footwear, retail, hotels, leisure and entertainment. Europe and the Middle East also present “huge opportunities,” likewise tapping E-Land’s organizational structure. Added Remington, “And we don't have to shortchange the U.S., which is one of the biggest markets in the world and where we already have a foothold with both brands for growth.”
One-Distribution currently has offices in Fountain Valley, CA, Barcelona, Spain, Sydney, Australia and Dongguan, China, and has five multi-brand retail stores in Los Angeles, New York City, Mexico City, Paris and Tokyo.
Regarding the company’s other brands, Remington said K-Swiss has been successfully brought back to its heritage in tennis, expanded into lifestyle and into court training, while “nicely pulling back from some accounts with a focus on better channels.”
The brand's new partnership with DJ/producer Diplo to build a team of 100 young entrepreneurs to help elevate the brand’s stature as part of “The Board” project has brought a “great deal of exposure” to K-Swiss over the last few months and the business is starting to expand again. Said Remington, “The campaign’s targeting young entrepreneurs and that’s our target market. So hopefully they can help us with some ideas and we’ll be able to educate them around business and help them.”
Palladium is particularly seeing strong growth in Asia with over 100 doors in China and is also opening stores in Africa, Vietnam and Central America. PLDM, which had been focused on Western Europe, for the first time has been brought to the U.S. and has also reached several new Asian markets following the E.Land acquisition. OTZ has also found some fresh growth in Asia.
Remington said the company is still exploring acquiring other assets. While he declined to provide KSGB ‘s sales currently, Remington said KSGB has a goal of becoming a $3 billion company with ten brands by 2020. Said Remington, “The KR3W and Supra acquisition already takes us a little bit beyond our three year horizon plan so we’re on our way.”