The history of Schwan-Stabilo began exactly 150 years ago with when Gustav Adam Schwanhäusser bought the bankrupt Nuremberg pencil company Grossberger & Kurz. Since then, the family-owned company based in Heroldsberg in Bavaria has evolved into one of the world’s largest producers of markers, highlighter pens and cosmetic pencils.
Now, the Schwanhäusser family is pulling out its checkbook again, acquiring the German sports clothing brand Maier Sports for an undisclosed amount. With the deal, Schwan-Stabilo supplements its fast-growing sports division, the third revenue pillar alongside cosmetics and markers.
Schwan-Stabilo acquired the backpack brand Deuter a few years ago, then added outdoor clothing and gear outfitter, Ortovox. The company recently generated about €100 million ($110.1 million) from sports-related products, or almost 20% of total sales volume. The sports business has enjoyed double-digit growth for years and strongly outperforms the rest of the company.
The deal, overseen by managing director Sebastian Schwanhäusser is part of a wider trend of consolidation in sportswear. Largely unnoticed by customers, ever-larger groups are taking over the market. Japanese sports equipment company Asics bought Haglöfs, the largest supplier of outdoor equipment in Scandinavia. Meanwhile, the Bavarian outdoor footwear company, Hanwag, the Hamburg outdoor retail chain, Globetrotter, and the outdoor clothing and equipment brand Fjällräven belong to the Swedish Fenix Outdoor Group. Finnish Amer Sports owns Arcteryx and Salomon, while U.S.-based VF Corp own North Face and Timberland.
Only a few companies really have a signature style of their own. Klaus Jost, Former CEO at Intersport
The market is consolidating for good reason. The outdoor goods business in Europe is stagnating. Customer closets already are stuffed with waterproof jackets, Nordic walking poles, sleeping bags and hiking boots. Europeans spend about €10 billion ($11 billion) every year on all-weather equipment, but with a lack of innovation, there is little incentive to replace older gear. In the face of bare-knuckle competition, many smaller independent labels find it increasingly difficult to survive.
Maier Sport, which previously was owned by a private investor, is among the smaller German labels. Founded in 1938 and based in Köngen am Neckar in Baden-Württemberg, it has just 160 employees. Not as well known as Jack Wolfskin, Schöffel, Mammut or Vaude, it ranks 18th among the outdoor suppliers to the retail chain Intersport and is positioned in the mid-price retail segment. It specializes in outdoor apparel for hikers as well as bicycling gear brand Gonso.
Schwan-Stabilo management is confident Maier Sports will do well in its stable of outdoor gear. “We will be seeing a crowding-out in the outdoor market,” Mr. Schwanhäusser said. “The strong will get stronger.”
With Deuter, for example, Schwan-Stabilo owns Germany’s largest rucksack producer, which guarantees display space among dealers. Ortovox, meanwhile, has carved out a niche in the small but growing business with ski tour fans. “Those leading in their discipline are the ones who have the advantage,” Mr. Schwanhäusser added.
Still, competition is murderous with 1,300 outdoor brands worldwide scrambling to win the favor of customers. Many products are completely interchangeable. “Only a few companies really have a signature style of their own,” said Klaus Jost, former chief executive at Intersport.
This puts even more pressure on the brands. “We can’t stand still, we have to grow,” said Rolf Schmid, CEO of Alpine outfitters group Mammut Sports, and president of the industry association European Outdoor Group. Mid-market companies such as Mammut can only survive against corporate brands such as North Face, Salomon and Adidas if they are large enough. “At some point, there will only be ten brands left," Mr. Schmid said.
That’s already the case in other segments of the sports industry. Soccer shoe sales are dominated by Nike and Adidas, for example, with nine of ten shoes sold bearing their logos. With running shoes, a handful of brands including Adidas, Nike and Brooks gobble up the lion’s share of sales.
A century and a half ago, Gustav Adam Schwanhäusser turned around an ailing pencil company and laid the cornerstone for a global corporation. His descendant, Sebastian Schwanhäusser, now finds himself in a similar position, hoping to repeat the success with rain jackets and hiking shorts.
Joachim Hofer's covers the high-tech industry and the IT sector as well as the outdoor- and recreational-industry for Handelsblatt. To contact the author: [email protected]