Dive Brief:
- Kontoor Brands will acquire outdoor and workwear brand Helly Hansen from Canadian Tire Corporation, according to a press release Wednesday. The deal is expected to close in the second quarter of 2025.
- The Wrangler and Lee parent company is paying about $900 million for the brand, through a combination of cash on hand and new debt financing, per the release. Kontoor expects Helly Hansen to generate more than $680 million in revenue for 2025.
- Also Wednesday, Kontoor reported preliminary Q4 results ahead of its scheduled earnings call next week. During the quarter, the company generated revenue of $699 million, a 4% increase year over year.
Dive Insight:
Scott Baxter, president, CEO and chairman of Kontoor, said the acquisition of Helly Hansen fits within the company’s strategy to expand its portfolio and accelerate growth, according to the news release on the deal.
The company said the Helly Hansen brand provides access to an “affluent, active and younger consumer base,” and its complementary geographic, category and channel footprint gives Kontoor “diversification benefits.” Kontoor said the deal additionally offers international scale benefits in Europe, the Americas, and the Asia Pacific region.
Helly Hansen has been operated by Canadian Tire Corporation for the last six years, according to its news release on the deal with Kontoor. Under the agreement, Helly Hansen products will still be sold at Canadian Tire Corporations-owned stores, including Mark’s in Canada.
“As our strategy becomes more singularly focused on great Canadian retail, it is time to pass this iconic brand into global hands,” Canadian Tire Corporation CEO Greg Hicks said in the release.
Helly Hansen was founded in Norway in 1877, and Canadian Tire Corporation credits the outdoor clothing manufacturer with creating some of the first supple waterproof fabrics. Its subbrands include Helly Hansen, Helly Hansen Workwear and Musto.
Meanwhile, Kontoor returned to revenue growth in Q3 after several consecutive quarters of declines. The preliminary Q4 results are in line with the expectations the company set in November. The company has been undergoing a transformation initiative called Project Jeanius to improve its profit and savings, which has included optimizing its supply chain and reducing its operating capacity.
