Scarpa scouts for partnerships and acquisitions

Reporting sharply improved financial results, Scarpa says it is planning to take over the distribution of its prod- ucts in some foreign markets in the course of this year. With corporate as- sets worth €24.6 million and virtually no debt, the Italian company, which specializes in mountaineering boots, is also looking around for partnerships or acquisitions to expand its product portfolio and leverage its international sales organization.

Founded in the town of Asolo in 1938 and taken over by the Parisotto family in 1956, Scarpa operates in a cluster where other shoemakers have been seeking to attain better economies of scale through various types of partnerships and ac- quisitions. The management of Scarpa insists, however, that it has no intention to invest outside the footwear sector, which it knows well, to avoid the kind of problems that have been encountered by other relatively small outdoor shoe companies in the region such as Asolo, following its takeover of Lowe Alpine.

The owners of Scarpa feel that their com- pany is sufficiently solid financially and performing well enough to get up to the next level smoothly. Excluding any possi- ble external growth, it is targeting an an- nual turnover of €100 million by 2015, up from €55 million in 2011, as it has been going up constantly in the past three years. Its global sales rose by 12 percent last year, and the trend accelerated in the first four months of 2012, showing an increase of 20 percent.

Profit margins have been growing even faster. Operating earnings before amortization (Ebitda) rose by 16 percent in 2011 to €8.1 million, while earnings before interest and tax (Ebit) jumped by 26 percent, reaching a ratio of about 9.2 percent of sales.

Sales improved in all 45 countries where Scarpa has a presence. The company’s sales subsidiary in the U.S., Scarpa North America, raised its sales by 12 percent to $12 million in 2011. It is projecting an in- crease of 16 percent for 2012.

In Asia, Scarpa bossted sales by 53 percent to almost €3.5 million for 2011. The biggest markets for the company there are Japan, South Korea, China, Taiwan and Hong Kong. In China, Scar- pa is working with a wholesale compa- ny whose shareholders control Sanfo, the largest chain of outdoor specialty stores in the country.

Scarpa sees interesting possibilities for growth this year and in the near fu- ture in some South American markets such as Chile, Colombia and Brazil.

Meanwhile, the company feels that it has won a patent infringement dispute with La Sportiva that has been drag- ging on since the end of 2010. On Feb. 16, a court in Milan rejected a request by La Sportiva for a permanent injunc- tion against the sale of four models of mountaineering boots developed by Scarpa: the Mont Blanc GTX, the Mont Blanc GTX WMN, the Grand Dru GTX and the Grand Dru GTX WMN.
La Sportiva has not appealed the rul- ing. Officials of this company had no comment last week on the case.

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