How Sorel Is Becoming a Bigger Growth Story at Columbia Sportswear
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With earnings season getting into full swing, one important trend is emerging: Small brands are the big growth stories at large companies such as Deckers Outdoor Corp. and Columbia Sportswear Co.
While Hoka One One’s 69% sales gain fueled Deckers, Sorel was up 32% at Columbia in Q2. The brand said revenues were $15.1 million — and the increase comes on the heels of a healthy Q1 performance when Sorel experienced 28% sales growth.
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Overall Columbia posted a 9% sales increase to $526.2 million in Q2, its lowest-volume quarter.
Sorel, known for its cold-weather footwear, is finding success with a strategy to expand beyond cold-weather styles. “The Sorel management team has been highly focused on pivoting the business to be winter plus,” said CEO Tim Boyle in a conference call. “For us to be successful, we need to have products year-round so our retailers can keep the brand on the floor. And that’s going to mean emphasizing spring product and unique differentiated merchandise.”
Matt Powell, an analyst at NPD Group, is confident the label can replicate its winning formula for spring and summer.
“I think the secret sauce is they’ve been able to leverage functionality with fashion,” Powell said. “When you think of a cute cold weather boot, Sorel is the first brand that comes to mind. People who like the cold weather products are going to be inclined to buy their warm weather products as well as long as they maintain the same aesthetic that they have in the winter.”
Looking ahead, Boyle believes Sorel could become a $1 billion player “at some point in time.” The CEO’s target might take a while to hit. Sorel’s overall sales for 2018, even with 14% growth, were only $260.3 million.
Aside from Sorel, the Columbia brand also experienced a 10% increase in revenues for the quarter. The label’s sales hit $454.9 million, up from $414.8 from the same period last year.
Columbia also said earnings per share increased 143% to 34 cents, compared to last year’s 14 cents. The results handily surpassed analyst estimates.
Below, watch the career advice Saucony president Anne Cavassa shared with FN.
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