Columbia Sportswear has rearranged its distribution in certain Central European countries. Clemens Weigand, regional sales manager for Germany, Austria and Slovenia, has left the Munich-based subsidiary, which has been struggling against the competition. Weigand’s responsibilities for the German market go to Mike Kaier, a former Fila manager in the region and most recently field sales manager of footwear for Columbia. Kaier will not be in charge of Austria and Slovenia. These countries will be covered by Cyril Pliquet who is at the same time European sales manager for Columbia’s technical high-end brand Mountain Hardwear.
Columbia suffered a 22 percent drop in local currencies in Europe in the 3rd quarter, with outerwear suffering the biggest decline, followed by sportswear and accessories, and forward orders are pretty bad, too. The company is reacting by cutting costs and doing more focused marketing in the region, while trying to improve design, but according to some observers its affordable market positioning is suffering a squeeze between the higher end of the market and the private labels of Décathlon, Intersport and other major players.
Globally, Columbia has reported a 3.7 percent increase in third-quarter sales, leading to a corresponding 3.8 percent increase in net income, despite significant order cancellations during a cool, wet spring. Fall and Spring orders were flat.
For the quarter ended Sept. 30, net income increased to $62,609,000 from $60,331,000. Total consolidated sales rose to $471.1 million, but the sales results varied from one brand to the other. The Columbia brand saw a 7 percent increase to $418.2 million, and Mountain Hardwear rose by 14 percent to $29.5 million. But Sorel fell by 9 percent to $19.1 million; Montrail lost 28 percent and reached $2.6 million, while Pacific Trail went down by 87 percent to $1.7 million.
In dollar terms, European sales fell by 16.7 percent to $55.3 million. They climbed by 2.9 percent in the USA to $284.2 million, by 8 percent in Canada to $57.8 million, and by 28 percent in other markets to $73.8 million. Sales of outerwear dropped by 0.9 percent to $215.8 million, but they grew by 10.4 percent in sportswear to $161.9 million, by 2.9 percent in footwear to $71.4 million, and by 8.4 percent in accessories and equipment to $22 million.
The company, which operates 10 outlet stores and one first-line Columbia brand store in Portland, plans to open several other stores for its current lines and about 15 more outlet stores annually for the next few years.
Columbia expects a fall in earnings for the fourth quarter of 2007 and the first quarter of 2008, in part because of additional investment in advertising and the opening of the new stores. It also foresees higher depreciation charges stemming from upgrades to some of its distribution centers.
