Case study: Jack Wolfskin
The flagship German outdoor clothing company, whose products bear the famous yellow wolf’s paw symbol, is a good example of a business which has seen huge growth due to the rise in the outdoor leisure market. However, like many of its competitors, it has struggled against tough market conditions.
In 2011, Blackstone acquired the business in a €700m deal and then accelerated international expansion beyond its German heartland. However, earlier this year Blackstone reached an agreement to hand over control of the business to a group of its lenders in a debt for equity swap.
Under the terms of the financial restructuring plan, the lenders will write off €255m and reduce Jack Wolfskin’s debt from €365m to €110m, with extended terms until 2022. In addition, lenders will strengthen the company’s liquidity by injecting €25m into the business in the form of a super senior loan.
As well as the tough market conditions, the company has faced difficulties in China since it took direct control of the distribution of its products to around 700 stores.
Last year the company launched its Tech Lab urban outdoor collection, seen as a bid to soften the boundaries between fashion and sport. Jack Wolfskin said the range showed that it was ‘possible to hit the mountain and look good doing it’. The company also changed its product structure, splitting it into Active Outdoor and Everyday Outdoor, the latter focusing on clothing for use in the urban environment and when travelling.