Arc'teryx takes Amer Sports to new heights

Author | Wang Xiaojun

Editor | Huang Yu

Known as the "middle-class harvesting machine," Arc'teryx continues to showcase its strong gold-digging ability.

On the evening of the 25th, Arc'teryx's parent company, Amer Sports, released its first annual report since going public in the U.S., and in this report, multiple data points saw explosive growth, exceeding market expectations. This is particularly striking in the current context where luxury goods performance is collectively cooling.

The report shows that Amer Sports' revenue for 2024 reached $5.183 billion, an 18% increase compared to 2023; operating profit increased by 56% year-on-year to $471 million, while adjusted operating profit grew by 33% year-on-year to $577 million.

The main contributor to this impressive performance is Arc'teryx. Amer Sports specifically emphasized that the global growth momentum of the Arc'teryx brand continues to expand, leading to a 33% year-on-year growth in the outdoor functional apparel segment in the fourth quarter, reaching $745 million.

Amer Sports executives further revealed that Arc'teryx's revenue for 2024 exceeded $2 billion. This also means that the revenue from the Arc'teryx brand accounts for about 40% of the entire group's revenue.

From a global regional market perspective, Greater China is the core driving force behind Amer Sports' growth. In 2024, revenue from this region grew by 53.7% year-on-year, contributing $1.298 billion in revenue, accounting for 25% of the group's total revenue. A significant portion of this performance comes from Arc'teryx.

Analysis shows that the rise of Arc'teryx is not only a victory of product strength but also a result of brand narrative and resonance with social culture.

In terms of positioning, Arc'teryx's jackets are mentioned alongside lululemon yoga pants and Salomon sneakers as the "middle-class three-piece set," successfully transforming functional clothing into symbols of daily life.

In recent years, Arc'teryx has not only represented professional outdoor apparel but has also become a symbol of middle-class identity. During the Year of the Snake Spring Festival, the limited edition jackets launched by Arc'teryx were once speculated to reach prices of 20,000 yuan, and the current transaction price still maintains around 10,000 yuan. This frenzy and price increase reflect its recognition in the market.

Industry insiders point out that the trend of outdoor sports is still heating up in the Chinese market, and with changes in consumer lifestyles, the potential for growth remains vast.

Moreover, the outdoor lifestyle represented by Arc'teryx is not merely about outdoor activities; it embodies a way of life, as these garments have integrated into the daily lives of middle-class individuals, even entering business work scenarios. This aligns with the current trend of "Gorpcore," which involves wearing outdoor clothing in non-outdoor sports settings. Functional apparel is no longer limited to outdoor activities but has blended into daily life.

Just as those wearing lululemon may not necessarily attend yoga classes, and those in Biyinlefen may not play golf, many wearing Arc'teryx are no longer just engaging in outdoor sports but are showcasing their lifestyle.

Additionally, Arc'teryx is solidifying its "luxury outdoor" positioning by collaborating with luxury brands and trendy labels to enhance its fashion quotient. This logic also applies to its choice of endorsers. In 2020, it officially announced Liu Wen as its first spokesperson, who had previously been the face of several luxury brands such as Bulgari, Chanel, and Gucci, further blurring the boundaries between outdoor and fashion In terms of sales channel operations, Arc'teryx has also abandoned its early reliance on niche channels for outdoor enthusiasts, shifting towards a retail network centered on large direct-operated stores, and expanding its voice through digital marketing to enhance user experience and community atmosphere.

In store selection, Xu Yang, then General Manager of Arc'teryx Greater China, proposed three major placement strategies: Better (better image), Bigger (larger area), Lower (lower floors), allowing the brand to compete alongside luxury goods in high-end commercial districts. For example, its global flagship store on Nanjing West Road in Shanghai and the Beijing SKP store are surrounded by numerous luxury brands.

Under Anta's operation, Arc'teryx's membership in Greater China surged from 14,000 in 2018 to 1.7 million in 2023, with the number of its stores increasing by more than 60 within five years.

However, beneath the impressive results lies a series of concerns. In the face of current high growth, Amer Sports has also provided expectations for a slowdown in growth.

Specifically, Amer Sports expects group revenue growth of 13% to 15% in 2025. Among them, the outdoor functional clothing department is expected to grow by about 20%, with an operating profit margin of about 21%; the mountain outdoor apparel and equipment department is expected to achieve low double-digit growth, with an operating profit margin of about 9.5%. These growth figures are all lower than the current growth rate.

Even the cash cow Arc'teryx cannot maintain growth indefinitely.

Greater China once contributed the majority of Arc'teryx's revenue, and the brand accounts for over 40% of the group's total revenue, with about half of its stores and most of its new stores located in Greater China. This concentration brings growth risks: if the Chinese economy slows down or consumer preferences shift, the group's performance may fluctuate significantly. Currently, growth rates in Europe and the United States are already far below those of the Chinese market, necessitating caution regarding overall profitability fluctuations.

Additionally, while Arc'teryx's direct sales strategy has brought considerable attention and performance, the high operating costs have also compressed profit margins. This has resulted in Arc'teryx's gross margin being not much different from that of Anta, despite its high price point.

Moreover, Arc'teryx's explosive growth stems from "pan-fashionization," but this also means that its professionalism has been diluted. This strategy may lead to the loss of professional users, as lululemon faced a slowdown in growth due to excessive expansion, serving as a cautionary tale. In the future, all brands under Amer Sports need to find a balance between fashion and professionalism to avoid losing core users due to excessive "breaking the circle."

Amer Sports' performance demonstrates the enormous potential of the high-end outdoor market; however, behind the applause of the capital market, how to withstand the competitive red sea, maintain brand tone, and transition from a once-popular internet celebrity brand to a resilient luxury brand is crucial for survival in such rapidly changing consumer trends.

Currently, for middle-class consumers, Arc'teryx is not just a jacket but a ticket to an ideal life. The value of this ticket ultimately depends on whether Arc'teryx can maintain clarity and restraint in a fervent market; if performance falters and products fail to continuously meet user needs, the middle class will quickly embrace another fresh alternative