Columbia Sportswear 2012 Annual Report Download - page 3

This letter contains forward-looking statements. Actual results may differ materially from those projected in these forward-looking statements as a result of a number of risks
and uncertainties, including those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, under the heading “Risk Factors.”
U.S. Gulf states, and in Central and South America, have embraced
PFG apparel as a leading performance and lifestyle icon. We are
very excited about the Spring 2013 global launch of our innovative,
sweat-activated, visible cooling technology - Columbia’s Omni-
Freeze® ZERO and Mountain Hardwear’s Cool.QTM ZERO. This launch
is being supported by the largest Spring advertising campaign in our
history, featuring integrated in-store, print, digital, grassroots guerilla
and broadcast elements. Omni-Freeze® ZERO and Cool.QTM ZERO
give outdoor and athletic consumers a powerful reason to seek out
our brands year-round for all of their warm climate and/or high-
intensity activities.
3. Capitalize on growth opportunities
in the LAAP region –
Sales in the LAAP region grew 11 percent in 2012, led by our
Japanese and Korean subsidiaries, as well as the efforts of our
independent distributors in Latin America and China. We expect
this region to be a continued source of growth over the next several
years. To drive growth in China, we are laying the groundwork for
a new 60/40 joint venture with our current independent distributor,
Swire Resources, Ltd., expected to commence January 1, 2014,
subject to customary regulatory approvals in China. Swire’s efforts
as our exclusive distributor over the past decade have already
positioned Columbia as a leading premium outdoor brand in this
large, growing market. As China’s economy and standard of living
have increased, so has interest in outdoor activities of all kinds. This
joint venture represents an opportunity to add another profitable
growth engine to our global business.
4. Continue to build a brand-enhancing
direct-to-consumer business –
Direct-to-consumer (DTC) sales represented approximately 29
percent of our global sales in 2012, up from 25 percent in 2011.
This part of our business comprises a growing base of branded stores
in the U.S., Korea and Japan; outlet stores, primarily in the U.S., that
help protect our brands during periods of inventory liquidation; and
localized branded ecommerce sites in 12 countries. In 2013, we plan
to add outlet stores in the U.S. and more branded stores in Japan
and Korea. Plus, the commencement of our China joint venture
in 2014 will bring almost 80 additional company-owned branded
stores into our global DTC platform. Creating pure online and brick-
and-mortar brand environments allows us to engage directly with
consumers and tell our innovation, performance and style stories,
helping to drive demand across all channels and geographies.
5. Transform our global business processes to
drive and support growth –
For us, the word “innovation” refers not only to our product and
marketing, but also to how we conduct our business, which has been
evolving rapidly as we have invested in long-term growth platforms
that are increasingly multi-channel, multi-brand and multi-national.
We continue to invest in a multi-year implementation of a new
global ERP platform, while simultaneously transforming many of
the global processes that support our business. We are investing
significant resources in this effort in order to become more nimble in
responding to market opportunities, improve delivery and customer
service, and drive profitability through better inventory management
and operating efficiencies.
We currently expect 2013 net sales to be comparable to 2012,
following two consecutive warm winters in North America and with
continued macro-economic weakness in Europe. The leadership
team remains committed to diligently managing operating expenses
while we evolve our brands, the organization and our operations to
position us for renewed growth.
However, we know that we cannot cost-cut our way to prosperity and
market leadership. We will continue to pursue growth catalysts by
investing in our brands, our products, our people and the initiatives
that we believe can grow Columbia Sportswear Company into a
much larger and more profitable business over time.
We have many tools at our disposal, starting with our brand portfolio
and our innovation platforms, all backed by a very strong balance
sheet that enables us to stay on offense through periods of slow
growth. As we approach Columbia’s 75th anniversary in 2013, we are
also mindful of the great strength of our heritage as an authentic,
innovative, outdoor company.
Thank you for your continued support.
Sincerely,
Timothy P. Boyle
President and Chief Executive Officer
Michigan Ave.
Chicago, IL
USA