IDC Capital, a New York-based investment fund that has already made many important investments in Chinese companies, has acquired a stake of nearly 20 percent in the Rossignol Group. One of the goals is to help the French company to optimize its penetration of the growing Chinese market for winter sports products in view of the 2022 Winter Olympic Games in Beijing.
Rossignol declines to quantify IDC's investment, which is being carried out through an equity increase that is diluting the other owners' shareholdings. In any case, Altor Capital, which acquired a 77 percent stake in Rossignol in 2013, will continue to hold the majority of the shares. Sandbridge Capital and the Boix-Vives and Weber families will remain as minority shareholders.
Rossignol's management feels that it can reach an annual turnover of €100 million in China within the next five years. It's an ambitious goal for the group, whose sales rose to €345 million in the financial year ended on March 31, compared with €320 million the year before, thanks in part to its recent acquisition of Dale of Norway and other operations. Apparel and bicycles each represented about 15 percent of the turnover.
Rossignol's winter sporting goods sales are relatively marginal now in China, where the group has been working for about 15 years through two distributors – Snowfavor for the Rossignol brand and Gespo for the group's Dynastar and Lange brands.
Besides its investment in Infront Sports & Media, which manages the media and marketing rights for the majority of the national and international ski federations, IDC is expected to give the Rossignol group more than just financial support for its development in China.
Founded in Boston in 1992, IDC claims to have been the first global investment firm that entered China 26 years ago. It has contributed to the growth of more than 600 major firms including Baidu, Xiaomi and Tencent. It has also been an investor in other sports-related entities including Moncler, Farfetch and a French football club, Olympique Lyonnais.
Rossignol and IDC are particularly encouraged by the strong growth of winter sports tourism in China. According to a report by PriceWaterhouseCoopers, it could generate overall annual revenues of €13.7 billion in 2025, including €2.1 billion for winter sports equipment alone. About 220 new ski resorts are expected to join the 560-plus existing ones by 2022. Their number grew by 25 percent in 2017, and many resorts are being modernized.
An estimated seven million people ski in China right now, many of them on an occasional basis, but the number of visitors to the ski resorts rose from less than 10,000 in the 1990s to 12.5 million last year, according to a report released during the Ispo Beijing fair in February, and the Chinese government aims to motivate as many as 300 million people to be active in winter sports by the time of the Olympics.
Many Chinese skiers are currently renting ski equipment or using second-hand products sold through the parallel market. China imported 56,000 pairs of skis for the 2016/17 season from western markets. Together with the grey market and domestic production, the total volume of the country's alpine ski market is evaluated by industry officials at between 70,000 and 130,000 pairs per year, with big variations in the estimates from one brand to the other.
Industry executives are also holding some hopes for the development of the Korean ski market, following the recent Olympic Games in Pyeongchang. They estimate its current size at between 20,000 and 40,000 pairs. Rossignol sells its products in South Korea through a distributor, Danwoo. IDC has invested in Gentle Monster, a rapidly growing Korean producer of creative sunglasses. LVMH invested in the company as well last year.
