The Rossignol Group is reinforcing its apparel business through the acquisition of Dale of Norway, the Norwegian brand of sports and outdoor knitwear. The deal was finalized on Dec. 28. The terms were not disclosed.
Dale has been most recently the property of Hilde Midthjell, a Norwegian businesswoman who became its majority shareholder in 2009 and fully acquired it in 2013 through her company, HiMi Invest, while taking over the position of chief executive. Under her leadership, Dale of Norway has been restructured, sharply raising its sales and profits. Its turnover soared from about 77.5 million Norwegian kroner (€7.9m-$9.3m) in 2012 to an estimated NOK 130 million (€13.2m-$15.6m) in 2017. While the company just about managed an operating profit six years ago, its operating profit margin for last year should be in the range of 23 percent.
Rossignol says that Dale fits neatly with the group's growing activities in the apparel sector, which are relatively weak in terms of knitwear. Rossignol has been investing consistently in recent years to build up its apparel range, not least with flagship stores opened in several upmarket ski resorts as well as in Lyon, Oslo and Paris. Driven by Alessandro Locatelli, who previously worked for prominent fashion brands, these efforts have been supported by Sandbridge Capital, a U.S.-based investment firm that acquired a minority stake of just over 5 percent in Rossignol in 2014.
Rossignol and Dale have many values in common, including their interest in the ski market. While skiing remains the Rossignol group's key activity, Dale has long been involved in this category as well, not least as the supplier of official sweaters for Norway's entire Olympic team.
Another common interest is local production. While different entities within the Rossignol group manufacture skis, bicycles and other products in Europe, Dale of Norway has its own production plant in Dale, a village north of Bergen. The facility is likely to be used for the production of at least some of Rossignol's knitwear.
Midthjell said that her company has deployed many efforts in the last years to become more efficient and profitable. The restructuring moves undertaken under her management have paved the way for more rapid development, but she argued that this could be more easily achieved with the backing of a larger group that already has an international infrastructure.
Dale and Rossignol were brought together by Altor Equity Partners, the Norwegian-based private equity fund that acquired a 77 percent stake in Rossignol in 2013. A key person in this context is Peter Sjølander, a former chief executive at Helly Hansen, which was previously owned by Altor. Sjølander joined Altor as senior executive adviser after he left the Norwegian sailing and outdoor apparel company.
Rossignol has fared relatively well in the ski market in recent years, but it has been on an acquisition drive to diversify its business, mostly with counter-seasonal products. The French group has acquired Time Sport and Felt in the bicycle market, along with Raidlight-Vertical, a French company specializing in trail running gear.
With Dale, Rossignol is buying a company that has a strong heritage. It went through a rough patch a few years ago but pulled through with restructuring measures that included the divestment of a local yarn production unit. The company's operations have been thoroughly upgraded recently in areas ranging from machinery to IT and management. At the same time, the product range has been vastly expanded and reorganized to target the sports and outdoor market as well as the fashion and casual markets. About 40 percent of the company's sales come from sports and outdoor stores, as compared with 60 percent in tourist and fashion stores.
Dale and Rossignol could clearly take advantage of synergies in terms of production as well as distribution. About 50 percent of Dale's turnover is generated by exports and the brand is particularly strong in the U.S., where Rossignol apparel has yet to take hold. Dale stands to gain exposure at the next Winter Olympics in South Korea and China, where it has yet to build up distribution.
The takeover talks apparently called for Dale's management to remain in place. Midthjell previously owned Dermanor & Dermagruppen, a company specializing in the distribution of cosmetics, which she founded in the middle of her medical studies. She earned enough from its sale to invest in Dale and several other companies.
Dale's management was reinforced a couple of months ago with the appointment of an export manager, Cato Jensen, who comes from the marine business. His grandfather and great-grandfather worked at the Dale factory. At the same time, Dale appointed Jannik Meyer as sales manager for Norway. He spent the last two decades at Coop, a leading Norwegian retailer. And just a few weeks ago, Dale expanded the team with the addition of John-Olav Evans to take care of sponsorships. Evans was former head of marketing and sponsorships for alpine skiing in the Norwegian ski federation, and he spent a few months at Bergans.