After several years of legal wrangles and drawn-out negotiations, a Dutch textile magnate has acquired the international rights to the O’Neill trademark as well as O’Neill Europe, the Dutch-based company that has long held licensing rights for the brand in Europe. Sealed at an undisclosed price, the tie-up should enable the action sports brand to implement long-delayed expansion plans in Europe.
Previously in the hands of O’Neill Inc, the U.S. company established by the brand’s octogenarian founder, Jack O’Neill, the rights to the trademark were bought by Logo International, a Dutch holding company comprising several clothing retail chains. Its weightiest asset is WE, a fashion chain with 227 stores in six European countries. Logo International further comprises Setpoint, a Dutch chain of men’s fashion clothing, and Beldona, the Swiss market leader in women’s apparel and beachwear, with about 72 stores. The last leg of the company is Waalwear, an international wholesale unit that markets clothing brands such as Van Gils, Jaguar, Bad Boys, Cakewalk and Jeep.
In a second transaction Logo International has acquired the surf brand’s European licensee, O’Neill Europe, from a dozen of individual and institutional shareholders. The company had been on the auction block for several years after a failed stock market launch. The largest shareholder was thought to be Theo Dietz, the company’s chairman, with a share of 22 percent, while his partner Rob de Kraa owned 21 percent. Another small chunk was in the hands of existing managers.
The international O’Neill trademark will be integrated into O’Neill Europe to form the brand’s international head office in Warmond, the Netherlands. At the same time Logo International has acquired O’Neill Australia Pty Ltd, the Australian subsidiary of O’Neill Inc. The parties involved welcome the fact that the multi-layered transaction should enable O’Neill to build up its brand more coherently at the international level.
Under a separate deal, it was agreed that the O’Neill family would continue to own and operate the O’Neill wetsuits business all around the world, as well as O’Neill’s outerwear business in the USA and the O’Neill surf shops in Santa Cruz, California. The managers at Logo International regard this as a guarantee of continued involvement by the O’Neills.
Although all parties declined to comment on the price of these transactions, others estimated the acquisition of O’Neill Inc. at about €140 million, while O’Neill Europe was sold at an estimated €130 million. Adding other expenses for legal matters and acquisitions of smaller units, the entire package is thought to have cost Logo International about €300 million.
Logo International is entirely owned by Ronald de Waal, a Dutchman who has made a fortune by building on his father’s clothing business. He originally had two Dutch store concepts called Hij (He) and Zij (She) but combined them into WE and embarked on a European expansion program to become one of the 50 wealthiest individuals in the Netherlands. De Waal is also a non-executive vice chairman of Saks Inc, the American retail company.
Dietz has agreed to leave O’Neill Europe along with Nick Verwer, former chief executive, although they have both been asked to stay on as consultants. O’Neill Europe has been led since last year by Frank van der Klaauw, who should remain in place under the supervision of Tom Heidman, chief executive of Logo International. Heidman was previously chief executive of Retail Network, a holding company that until last year owned two Dutch footwear and sports banners, Scapino and Perry Sport.
O’Neill’s European expansion has been hampered for several years by costly legal proceedings between O’Neill Europe and O’Neill Inc. regarding the scope of their license. The Europeans won the legal battle but agreed not to seek damages from O’Neill Inc. in order to facilitate an international settlement, and the agreement with Logo International apparently puts an end to all the legal shenanigans.
The most immediate synergies should be achieved on the retail side. O’Neill Europe has mooted plans to open scores of single-brand stores but has been unable to implement them so far. Logo International will bring both the funds and the expertise to go ahead with the plans, which could see O’Neill creating a network of up to 100 stores around Europe over the next 5 years.
For the time being there are less than 30 O’Neill stores in Europe. More than half of them are in the UK, operated by Blacks Leisure, with only 3 more in the Netherlands, 2 in Portugal, and a dozen stores under the Chill Out banner in Belgium, selling other brands as well. Two more openings are planned for this summer, in France and Germany. Further synergies are to be expected in terms of product development, sourcing and marketing.
On the other hand, Logo International has little experience so far in countries outside Europe. In the USA it will continue to lean on La Hoya, O’Neill long-time apparel and footwear licensee. In Asia, O’Neill has a Japanese licensee handling several other countries, but its coverage is patchier than in Europe, and it remains to be seen how Logo International could help O’Neill to more thoroughly explore the Asian market.
The transaction itself is the result of many months of talks with a flurry of potential investors. The breakthrough only came earlier this year after Rattan Chaddha, the founder of Mexx, another Dutch textile company, withdrew from a group of investors that were meant to acquire O’Neill, paving the way for a takeover by De Waal alone.
