Columbia Sportswear 2013 Annual Report Download - page 9

5
We distribute the majority of our products sold in the United States from distribution centers that we own and operate
in Portland, Oregon and Robards, Kentucky. In some instances, we arrange to have products shipped from the independent
factories that manufacture our products through third party logistics vendors and/or directly to wholesale customer-
designated facilities in the United States.
LAAP
The LAAP region accounted for 21.0% of our net sales for 2013. We sell our products in the LAAP region to
approximately 200 wholesale customers in Japan and Korea and to 14 independent distributors that sell to approximately
700 wholesale customers in locations throughout the LAAP region, including Australia, New Zealand, Latin America and
Asia. In addition, as of December 31, 2013, there were 131 and 261 dealer-operated, branded, outlet and shop-in-shop
locations in Japan and Korea, respectively. We also sell Columbia, Mountain Hardwear, Sorel and Montrail products through
e-commerce websites in Japan and Korea. In addition, we earn licensing income in our LAAP region based on our distributors’
production and sale of licensed products.
We distribute our products to wholesale customers, our own retail stores and licensed stores in Japan through an
independent logistics company that owns and operates a warehouse located near Tokyo, Japan. We distribute our products
to wholesale customers, our own retail stores and licensed stores in Korea from leased warehouse facilities near Seoul,
Korea. The majority of sales to our LAAP distributors are shipped directly from the independent factories that manufacture
our products.
In August 2012 we entered into an agreement with Swire Resources Limited ("Swire"), our then-current independent
distributor for the China market, to establish a joint venture for purposes of continuing the development of our business in
China. The joint venture, in which we hold a 60% interest, began operations on January 1, 2014. At commencement, the
joint venture began operating the distribution network established over the past nine years by Swire, consisting of, at
December 31, 2013, approximately 70 retail locations and distribution relationships with 51 wholesale dealers that operated
approximately 700 retail locations. As a majority-owned entity that we control, the joint venture's operations are included
in our consolidated financial results. During 2013, our financial results were affected as we transitioned to the joint venture
from our previous third-party distributor relationship. We funded our initial capital contribution of $12.0 million in cash
and Swire funded its initial capital contribution of $8.0 million in cash to the joint venture during the second quarter of
2013. We incurred approximately $3.7 million of organizational and other pre-operating costs, including personnel costs,
professional fees and selling-related expenses, during 2013. Our shipments of spring 2014 inventory for the China market,
which began in the fourth quarter of 2013, were sold directly to the joint venture entity. The related sales, gross margin
and licensing income, which we would have recognized in the fourth quarter of 2013 under the historical distributor model,
were deferred and will be recognized as the joint venture sells that inventory to wholesale customers and consumers. As
of December 31, 2013, inventory of spring 2014 and prior seasons, totaling $20.6 million, was acquired by the joint venture.
During 2013, we deferred gross profit and licensing income related to this inventory totaling $4.9 million, which we will
recognize in future periods as the inventory is sold by the joint venture to wholesale customers and consumers.
EMEA
Sales in our EMEA region accounted for 14.3% of our net sales for 2013. We sell our products in the EMEA region
to approximately 5,700 wholesale customers and to 12 independent distributors that sell to approximately 700 wholesale
customers in locations throughout the EMEA region, including Russia, portions of Europe, the Middle East and Africa. In
addition, as of December 31, 2013, we operated 7 outlet retail stores and 2 branded retail stores in various locations in
Western Europe. We also sell Columbia and Sorel products through brand-specific e-commerce websites in Austria, Belgium,
Finland, France, Germany, Ireland, Italy, Netherlands, Spain and the United Kingdom.
We distribute the majority of our products sold to EMEA wholesale customers and our own retail stores from a
distribution center that we own and operate in Cambrai, France. The majority of sales to our EMEA distributors are shipped
directly from the independent factories that manufacture our products.
Canada