LionRock Capital is ready to “take the leash off” outdoor clothing business Haglöfs and grow the business through collaborations and into the Chinese market, Tom Pitts, LionRock’s head of Europe, told PE Hub Europe.
LionRock agreed to acquire a 100 percent interest in Haglöfs from Asics Corporation in late 2023. Haglöfs is a company based in Bromma, Sweden, that designs, develops and markets clothing, footwear and hardware products. The company has been a wholly owned subsidiary of Asics, a multinational sportswear brand headquartered in Kobe, Japan, since 2010.
“The Japanese ownership brought a lot of discipline but at times, you want to take the leash off and see what happens,” said Pitts.
Instead of focusing on M&A, LionRock will look at opportunities via brand collaborations, a tried-and-tested method with a previous investment, UK footwear company Clarks. “The cool thing about collaborations is that they don’t have to be right on point,” said Pitts. “Some of the best collaborations we had with Clarks were with a chicken and waffle company or with an FM radio station.”
Straying too far with collaborations might be detrimental, however, leading the brand to come across “clunky and clumsy” and risking losing “some of that resonance you have with your original cohort”, Pitts added.
“You have to be eyes wide open with what you’re doing, but there are elegant ways of finding – in terms of the Venn diagram of consumers – a bigger intercept. We’ll play with that.”
The sports and outdoor clothing segment is “pretty hot” as consumers stick to healthy habits picked up during the covid-19 pandemic, said Pitts. Households having tighter budgets for holidays is another tailwind, with consumers opting for something closer to home, such as a hike with some sandwiches, according to Pitts.
LionRock has a disposition towards sports, according to Pitts. One of the firm’s largest LPs is Li Ning, who owns a sportswear company under the same name. Li is a former Olympic gymnast and ignited the cauldron at the 2008 Summer Olympics. “He’s one of the most important players in sports retail in China,” said Pitts. “That certainly gives us some edge.”
China is also a logical place for LionRock to begin Haglöfs’ foreign growth journey, said Pitts. In China “400 million people did something outside last year – there are cash unobtrusive ways of finding customers in China”, he added. Other areas of expansion include Germany and France, where Haglöfs as a brand is underpenetrated, according to Pitts.
Even with plans for collaborations, LionRock wants to respect Haglöfs’ position as a heritage brand. “This isn’t about restructuring; it’s about how we find expansion,” said Pitts. “The product is what led us to the company. We’ll leave that untouched.”