American apparel company Columbia Sportswear said its joint venture with Hong Kong’s Swire Resources has commenced.

The JV, Columbia Sportswear Commercial Company is headquartered in Shanghai.

“We are looking forward to pursuing what we believe are significant long-term growth opportunities, capitalising on the continuity and expertise of the joint venture’s management and employees, and their deep understanding of the China market,” said Columbia’s president and CEO Tim Boyle.

The JV inherits the broad distribution network established over the past nine years by Swire Resources, which has acted as Columbia’s exclusive distributor in China since 2004. That network consists of 51 wholesale dealers that, as at December 31, operated some 660 Columbia Sportswear stores and 47 Mountain Hardwear stores in 180 cities.

In addition, the JV directly operates approximately 70 Columbia branded retail locations in seven cities.

To promote operational continuity, at commencement, the JV was staffed primarily by management, administrative and retail operations personnel who transferred from comparable roles they held at Swire Resources.

“China’s outdoor market is benefiting from increasing consumer affluence, greater interest in outdoor leisure activities, and increased investment from global and domestic outdoor brands,” said executive director JB Rae-Smith, trading and industrial division of Swire Pacific.

Reflecting Columbia’s 60 per cent ownership stake, the JV will be fully consolidated in Columbia Sportswear’s operating results and financial position beginning with the first quarter of 2014, in accordance with US Generally Accepted Accounting Principles (GAAP). The JV agreement carries an initial term of 20 years.

In addition to serving as JV partner in China, Swire Resources will continue as Columbia’s independent distributor in Hong Kong and Macau.