ANTA SPORTS invests $290 million to "bottom fish" on Wolf Claw Logic: filling the gap in the mass outdoor market?

ANTA (2020.HK) has once again played the acquisition card, acquiring the well-established German outdoor brand Jack Wolfskin.

According to the transaction arrangement with Topgolf Callaway Brands (hereinafter referred to as Topgolf), ANTA will fully acquire the German Jack Wolfskin for USD 290 million, with the transaction expected to be completed by the end of the second quarter or the beginning of the third quarter of 2025.

Founded in 1981 and headquartered in Idstein, Germany, Jack Wolfskin focuses on mass outdoor activities, covering scenarios such as hiking, cycling, skiing, and camping.

The iconic Texapore series of membrane materials is known for its waterproof and breathable properties and has led industry standards.

Compared to brands like Arc'teryx and Salomon, which were not well-known domestically before the acquisition, Jack Wolfskin entered the Chinese market as early as 2007, reaching a peak of 700 stores. However, it has gradually fallen behind in recent years.

The brand still has a considerable market foundation in China and Europe.

ANTA's acquisition model for Jack Wolfskin is also different from previous ones.

When acquiring international brands like Descente and KOLON, ANTA mainly obtained the operational rights for the China region by establishing joint ventures with the brand owners.

After the completion of this transaction, the Germany-based Jack Wolfskin will be fully managed by ANTA Group.

Ding Shizhong stated that this acquisition of Jack Wolfskin will be a new milestone in ANTA Group's globalization, with a multi-brand strategy providing a solid development foundation to cope with global uncertainties.

In terms of scale, Jack Wolfskin may not stand out significantly within ANTA's vast sports goods empire.

Topgolf previously estimated that Jack Wolfskin's revenue for the fiscal year 2025 would be approximately EUR 325 million, equivalent to about RMB 2.7 billion, which is less than one twenty-fifth of ANTA's projected revenue for 2024.

After completing the "bottom fishing," ANTA may need to rejuvenate the brand's vitality in the Chinese market.

With almost no failures in brand acquisitions, can ANTA successfully "revive" Jack Wolfskin this time?

"Filling the Gap" in Mass Outdoor

ANTA's multi-brand empire is striving to cover as many different consumer groups as possible through precise positioning.

The main brand is positioned for mass sports, FILA for fashion sports, Descente for professional sports focusing on skiing and outdoor categories, and KOLON Sports for casual outdoor.

The addition of Jack Wolfskin completes ANTA's puzzle in the mass professional outdoor segment.

Jack Wolfskin's products are positioned in the RMB 1,000-3,000 range, complementing ANTA's current outdoor brand layout in terms of demographics, functionality, and pricing.

The outdoor market is still in a period of rapid development, and compared to the niche high-end positioning of Descente and Salomon, the mass professional outdoor field where Jack Wolfskin operates has a higher ceiling.

ANTA's early layout in the mid-range price segment is seen as a defensive strategy in response to changing consumer directions.

This acquisition also adds imaginative space for globalization, particularly benefiting ANTA's further penetration into Europe.

Morgan Stanley analyst Dustin Wei stated that the tariff war has "minimal impact" on Jack Wolfskin's operations, "because the company primarily focuses on the European and Chinese markets and currently has no plans to expand into the U.S. market." As of January 2025, Jack Wolfskin has 495 specialty stores worldwide, with 226 located in Europe and 269 in Asia.

ANTA stated that Jack Wolfskin has a particularly high penetration rate in shopping malls and communities in the European market, especially in German-speaking regions, which will significantly enhance the group's influence in that area.

In the Chinese market, Jack Wolfskin has considerable development potential.

Guosheng Securities analyst Yang Ying estimates that Jack Wolfskin's business in China accounts for nearly 30% of its total.

Puyin International analyst Lin Wenjia believes that Jack Wolfskin's global brand strength and market positioning are comparable to the American outdoor brand The North Face.

However, its influence and revenue scale in China are far lower than the latter, indicating still untapped development potential.

There are also voices suggesting that Jack Wolfskin is currently mired in operational difficulties, with long-term promotions and rampant counterfeit goods diluting the brand's value to a low level.

This is not unrelated to the brand's multiple ownership changes and frequent management turnover.

In 2018, Topgolf completed the acquisition of Jack Wolfskin's equity from Bain Capital and other institutions for €418 million (approximately RMB 3.395 billion).

In 2020, Jack Wolfskin's new CEO Richard Collier proposed the brand claim "We Live to Discover," attempting to attract new consumer groups through brand rejuvenation.

However, the effects of the transformation have not yet materialized.

Four years later, Jack Wolfskin announced the closure of its U.S. operations, concentrating resources on the two key markets of Europe and China.

In 2024, Topgolf's revenue was $4.239 billion, a year-on-year decrease of 1.1%, with the decline in Jack Wolfskin's European business being one of the main reasons.

Looking at its recent development in the Chinese market, Jack Wolfskin has almost missed out on the growth dividends of the outdoor market.

Of the remaining 36 directly-operated stores, 10 are located in outlet malls and other non-core business districts.

The acquisition price that ANTA paid for Jack Wolfskin is nearly 60% of the transaction price from seven years ago, reflecting the brand's recent decline.

How to Rebuild?

Rebranding acquired international brands has always been ANTA's forte.

However, compared to the mass-market positioning of Jack Wolfskin, its recent successful cases have mostly focused on high-end, niche vertical brands.

The success of brands like Arc'teryx and Descente does not rely on celebrity endorsements but rather on effective "community marketing."

This involves first establishing the brand as a social currency within specific circles, then leveraging core customer groups to release word-of-mouth and influence to the broader public.

ANTA's current marketing strategy for its main brand emphasizes "good products" and "cost-effectiveness," more through collaborations with sports stars and Olympic champions to build professional influence.

Jack Wolfskin's approach is likely to be different.

Zhang Jie (pseudonym), a veteran in the sportswear industry, told Xinfeng that Jack Wolfskin may highly benchmark its brand and product development against The North Face, "focusing on highlighting the logo, with prices possibly a bit higher than The North Face."

"In simple terms, it's about copying FILA's strategy," Zhang Jie said.

ANTA has positioned FILA as a high-end sports fashion brand, amplifying its voice through corresponding local celebrity marketing and deeply cultivating mid-to-high-end business districts in first- and second-tier cities with a fully direct sales model Zhang Jie believes that Wolf Claw is likely to follow the development path of FILA in the future, leveraging Anta's retail channel advantages to quickly expand direct-operated stores nationwide, "opening next to FILA, Nike, especially The North Face."

"Wolf Claw may not reach FILA's scale of 30 billion, but it will avoid many detours that FILA took back in the day," Zhang Jie said.

On the product level, it is expected to further align with youthfulness and localization.

"Fashion remains the main theme of the outdoor market," said Li Yangjun, Executive Deputy Secretary-General of the Camping Industry Professional Committee of the China Sports Federation, to Xinfeng. Outdoor brands emphasize professional endorsement, but essentially, they are still in the trend business.

Li Yangjun believes that after incorporating Wolf Claw, Anta will likely form a localized design team, downplaying the German hardcore label and adopting a "light outdoor" approach.

The future development roadmap for Wolf Claw seems clear, but there are significant obstacles in the current market environment.

When Anta acquired FILA years ago, there were still many market gaps in the domestic high-end sports fashion sector, and FILA fully enjoyed the market dividends of this niche.

The competition among outdoor sports brands is now a red ocean—Columbia, The North Face, Kailas, and Pathfinder have all risen.

Wolf Claw's CEO Matthew Jung once mentioned that the advantages of domestic outdoor brands lie in product design, digital retail experience, and supply chain responsiveness.

"But most importantly, local brands are more willing to make long-term investments locally, thus more willing to invest more in marketing promotion and retail, while foreign brands pursue short-term profits," Matthew Jung stated.

Regardless of the direction, it is highly probable that Anta will continue to invest resources into Wolf Claw in the future.

HuaXi Securities analyst Tang Shuangshuang believes that the outdoor market has a positive long-term outlook, and Wolf Claw is expected to contribute incremental performance to Anta, but there may be losses and cost pressures from consolidation this year.

By the end of 2024, Anta's net cash level will reach RMB 31.4 billion. The expenditure for this acquisition accounts for about 6.7%