An barely comprehensible, procedural stock exchange document filing in the midst of the Christmas New Year holiday season appears to foreshadow a major strategic move by German lifestyle apparel brand Jack Wolfskin.
The announcement, insignificant on the surface, was filed by Tristate Holdings Limited with the Hong Kong Stock Exchange under the name of Peter Wang Kin Chung, chairman and CEO. “The board wishes to inform the shareholders that the group and Jack Wolfskin have agreed to conditionally early terminate… the Jack Wolfskin Distribution Licence and the T-shirts/Polo shirts licence (originally expiring in December and July, respectively, in 2015),” it began.
But unlike other such run-of-the mill, common parting of the ways between brand and geographic distributor, Tristate’s subsidiary Shanghai Tristate will now provide “among other things” consultancy services to JW PRC Co, a new company which will manage the company’s operations in the People’s Republic of China and which is apparently a wholly owned subsidiary of Jack Wolfskin in Germany. The new agreement expires on December 31, 2017.
“Shanghai Tristate shall receive a service fee amounting to substantially the entire pre-tax and interest earnings of JW PRC for the period from termination to 31 December 2015, plus an additional service fee which will be determined based on certain agreed percentages of the gross profits of JW PRC Co in 2016 and 2017.”
The group will also be re-appointed as a distributor of Jack Wolfskin branded products in Hong Kong and Macau, but not mainland China.
The consultancy services during the next two years will primarily focus on assisting JW PRC develop, procure, sell and market Jack Wolfskin branded products in China and with the management of the Jack Wolfskin PRC Business, including creating and implementing growth and strategy plans and providing operational oversight, for the further development of the Jack Wolfskin PRC Business.
It will provide JW PRC with transitional services in the areas of human resources, administration, IT, finance, warehousing and logistics. Existing franchisees, employees and offices will transfer to the new business along with inventory.
The Group will also be re-appointed as a distributor of the “Jack Wolfskin” branded products in Hong Kong and Macau.
Jack Wolfskin is a rapidly growing outdoor brand which has achieved significant crossover into the casual apparel market, thanks to new brand-building flagships in key European cities such as London, (where it has a two-storey flagship store on Regent St). The brand is one of the leaders in the so-called “wildnerness chic” phenomenon whereby consumers are wearing footwear designed for mountain climbing and outdoor wilderness clothing as street fashion.
Here the company explains its unique Fibercloud mountainwear insulation technology.
Founded in 1981, it is currently owned by US private equity investor The Blackstone Group. Its products include mountain and leisure clothing, footwear, rucksacks, sleeping bags, and tents.
Its revenue in 2012, the first year into Blackstone’s ownership, was 351 million euros from about 600 own brand stores but this network is believed to have grown somewhat since then.
To date in Asia, the company’s products are sold through dealers in China, Hong Kong and Japan and in dealers and company-branded stores in South Korea.