Canadian Tire buys Norwegian clothier

Retailer’s CEO says deal serves as ‘foundation’ to build upon

Canadian Tire Corp. views its $985-million acquisition of Norwegian outdoor clothing and gear maker Helly Hansen as a “major step forward” to diversify its offerings at home and launch new opportunities in international markets.

“This is a brand that we truly believe has a lot of runway ahead of it internationally,” CEO Stephen Wetmore said.

The Toronto-based retailer has long been one of Helly Hansen’s biggest customers, and the deal announced Thursday will bolster a number of its product categories, including camping, hunting and fishing, at both Canadian Tire department stores and its Mark’s clothing chain, he said.

Helly Hansen was founded in Moss, Norway, in 1877 and is now sold in more than 40 countries around the world.

It has “successfully and profitably entered many markets” globally with its outdoor adventure, sailing, skiing and casual industrial brand, Wetmore said in an earlier conference call with financial analysts.

“This too will serve as a foundation for us to build upon in future years with existing or new owned brands,” Wetmore said during the call.

Canadian Tire identified the Norwegian brand as an acquisition target shortly after it established its consumer brands division, seeing it as an opportunity to strengthen some of its most “strategic and brand-sensitive categories,” but the deal took 18 months to come together, Wetmore said.

The outdoor brand will continue to be sold in a broad range of stores in Canada, not just Canadian Tire stores, the company said. Canadian Tire will assume $50 million in debt under terms of the deal. Helly Hansen CEO Paul Stoneham and the management team, based in Oslo, Norway, are expected to continue to lead the business. Canadian Tire reported Thursday a first-quarter profit attributable to shareholders of $78 million, or $1.18 per share for the quarter, down from $87.5 million, or $1.24 per share a year ago. Analysts had expected earnings of $1.38 per share.

However, Sklar calculated that earnings adjusted for the one-time charge were closer to analysts’ estimates at $1.37 per share. Revenue totalled $2.81 billion, up from $2.72 billion in the same quarter last year. Consolidated same store sales were up 5.2 per cent in the quarter as Canadian Tire gained 5.8 per cent, Mark’s added 3.4 per cent and FGL, which includes the Sport Chek banner, gained 3.9 per cent.