Columbia Sportswear has bought OutDry Technologies, making it one of the few sporting goods companies to take a stake further up the textile supply chain. The financial terms of the deal were not disclosed, but Columbia’s outlay is probably minor, considering that this breathable waterproofing technology generated sales of less than €3 million for its Italian developers and its financial partners last year.
Columbia has bought the OutDry brand and the related patents, other intellectual property rights and machinery from Nextec, a company formed in 2009 to bring in fresh capital and two new investors besides OutDry’s co-founders, the brother Luca and Matteo Morlacchi. They will act as chief executive and general manager, respectively, of OutDry, which will keep its base in Italy while being run as a wholly owned subsidiary of Columbia. The deal should be finalized in the third quarter of this year, and Columbia doesn’t expect it to have an impact on its 2010 financial results.
OutDry is a waterproof/breathable technology that has been under development since 1998 and on the market for about ten years, but despite some rather obvious advantages, it has not been adopted widely, probably because it has failed to become a well-known brand like Gore-Tex.
One of the subsidiaries of Columbia, Mountain Hardwear, adopted it with some success for its fall/winter 2009/10 collection, and the process will now be quickly introduced in numerous styles of footwear and gloves that will be sold under the Columbia brand and in the footwear of two other brands of the group, Montrail and Sorel, starting with the fall/winter 2011/12 season. The group also sees applications of OutDry in its own military boot program.
At a conference staged during the Outdoor Retailer show in Salt Lake City Wednesday, Tim Boyle, president and chief executive of Columbia Sportswear, said the group would review existing arrangements with the present licensees of OutDry, make a selection among them and strive to find new licensees within and outside the outdoor industry. He said he saw a potential for further development of OutDry in the casual, fashion and safety shoe segments, where there is no competition with Columbia. He indicated that the group would make significant investments in the education of store personnel, in graphic presentations and in advertising to support the image of the OutDry brand among retailers and consumers.
So far, OutDry has had limited success with its technology. Its biggest customer is Décathlon, which has been using its technology on a non-branded basis since 2007 in its private label outdoor and running shoes, with an annual volume of more than 200,000 pairs. The prioneer about ten years ago was a small Italian company, Gronell, that continues to use it. Other shoe companies that have adopted OutDry are END, Kamik and Trezeta. Lafuma has been using OutDry in some of its outdoor shoes.
Musto has adopted the technology for sailing gloves due to be sold in the spring/summer 2011 season. OutDry also supplies the Asian operation of Bridgestone, Descente and Mont-Bell. Outside the sporting goods sector, it counts Hugo Boss as a client. Two producers of safety boots, Sixton of Italy and Totestors of the U.K., use OutDry. So does a Polish maker of military and safety boots, Desma.
OutDry is expected to support the technical credibility of Columbia Sportswear, with products priced in the same segment as those that have Gore-Tex membranes. It joins Columbia’s Omni-Dry waterproof membrane, which will be used in its apparel starting next spring.
OutDry’s primary differentiator from Gore-Tex is that it laminates the membrane directly to the outer shell of a boot or glove rather than on the inner lining or bootie. Because of the complexities of taping and sealing many small pieces in footwear and gloves, Gore-tex has instead relied on a self-contained PTFE bladder that is placed in the boot or the glove. OutDry claims that this bladder causes a great deal of water to get inside the shell, making the boot or glove heavier and colder. OutDry’s process is said to resolve this issue by stopping the water at the outer shell layer.
Relatively few companies have actually invested in a technology to this degree. Nike, of course, bought a technology to make Air and has enjoyed success with this over the last 25 years. Adidas a few years ago bought Textronics, a maker of smart textiles that can do things such as monitor heart rates. OutDry and Textronics have both been interesting technologies that have not achieved the critical mass needed for commercial success and that have looked for major brands to put some firepower behind them (more in The Outdoor Industry Compass).
