The Scott Sports group continues its strong external growth strategy. We understand that it is already working on another acquisition, which may be sealed before the end of this year, after striking a preliminary agreement last month for the takeover of Dolomite from the Tecnica Group.
Scott's management indicates that it plans to develop again Dolomite's range of technical mountaineering shoes, which is something that its former owner was unable to do because of internal competition with Lowa. Scott's present footwear range is mainly meant for running.
Dolomite is an iconic Italian brand of functional apparel and footwear whose origins go back to 1897. After the change of ownership, the Tecnica Group, which acquired Dolomite in 1998, will thus concentrate on its remaining assets in the technical and athletic segment of the sporting goods market with its Tecnica, Nordica, Blizzard, Rollerblade and Lowa brands. Four years ago it divested the more lifestyle-oriented Think Pink brand of apparel.
Under the management of Marco Zaja, who will remain in his position under Scott's ownership, Tecnica has managed to double Dolomite's sales in the past five years to a projected 2015 level of €18 million, with more than 60 percent of the turnover generated outside Italy, and to make it profitable, by following a strategy similar in a way to that of Moncler. The distribution has been expanded to more than 1,500 accounts worldwide.
Sales have increased although Dolomite has been slimming down its product range, focusing the brand on quality and vintage, functiona-l and lifestyle products with an Italian style that can also be worn in the city. In the past year alone, Dolomite's footwear sales continued to increase, reaching nearly 170,000 pairs worth €8.6 million, in spite of the elimination of technical categories like climbing shoes. In footwear, it is now positioned in a segment similar to Timberland's.
No details have been published about the cost of the transaction, but according to well-informed sources, it has been priced at just under €9 million. Late last year, Tecnica had agreed in principle on a lower valuation of €6.7 million for the acquisition of Dolomite, plus the cost of inventories and other assets, with an American equity fund, Symphony Global Brands, but nothing came out of it.
As it did with Symphony, Tecnica has agreed with Scott that Dolomite's entire staff of 30-odd employees will be retained by Scott. The brand will continue to operate, at least for a while, at the group's headquarters in Montebelluna.
Scott has become more acquisitive since Youngone Corp., the big Korean-based manufacturing and distribution group, raised its stake in the Swiss company from 20.1 percent to 50.01 percent earlier this year. Last summer it bought a German bicycle company, Bergamont Fahrrad Vertrieb. Furthermore, Scott acquired the European license for Outdoor Research, an American outdoor company in which Youngone has been investing gradually.
For his part, Beat Zaugg, chairman and chief executive of Scott and its former controlling shareholder, recently bought a 70 percent stake in Transa Backpacking, the biggest outdoor retailing chain in Switzerland.
Once the takeover of Dolomite is completed, Scott plans to concentrate on the European market for the development and repositioning of the brand before attacking other markets. At that point, Dolomite may benefit from Scott's strong distribution in the U.S.. Scott bought the U.S. subsidiary of another Italian company, Garmont, in 2012. It bought its ski boot business last year.