Deal focus: Macpac aims to scale new heights

Jan Cameron got her start in business hand-sewing sleeping bags for a sports clothing brand in the 1970s. This led to the creation of Kathmandu in 1987, an early mover in Australia and New Zealand's outdoor apparel and equipment space. Quadrant Private Equity and Goldman Sachs JBWere bought the business nearly 20 years later, and Cameron walked away with an estimated NZ$275 million ($185 million).

Kathmandu continued to build scale and went public in 2009. It remains the market leader with 160 stores across Australia and New Zealand. Cameron, meanwhile, moved on to another outdoor apparel and equipment provider, Macpac. Her involvement dates back to 2011, but by that point the business was already part-owned by Bernie Wicht, Cameron's ex-husband and an early collaborator at Kathmandu.

"They never set out to make a replica of Kathmandu. This business was not meant to become as mass market as Kathmandu is now," says Paul Readdy, a director at CHAMP Ventures, which recently acquired a majority stake in Macpac. "While Macpac doesn't have the brand recognition and depth of clientele of Kathmandu, we believe it is stronger in terms of brand authenticity and quality."

Macpac was set up in 1973 as a supplier of high-end climbing packs. From there, it moved into tents and other equipment, and then footwear and apparel. The company was a wholesale player until 2008 - around the time Wicht arrived - when a retail element was introduced. It now has 43 stores (27 in New Zealand and 16 in Australia).

CHAMP is said to have paid around A$70 million ($51 million) for Macpac, with Cameron, Wicht and CEO Alex Brandon holding minority interests. The management team has said that part of CHAMP's appeal was its work on Lorna Jane, an Australian wholesaler and retailer of women's fitness and leisure apparel that has seen significant growth.

There have been discussions as to how the companies can leverage each other's knowledge. Readdy notes that Lorna Jane has already gone through the Australia expansion that Macpac is now targeting. "Macpac's sales per square foot are higher in New Zealand than in Australia, and that's partly because people don't know what Macpac is in Australia," he explains. "Similarly, Lorna Jane was a Queensland business that then went national. It took a while for sales per square foot to increase in Victoria and New South Wales."

There are also plans to build up Macpac's nascent online business and expand the company's international wholesale activities, which are currently limited to equipment distribution agreements in Europe and Japan. CHAMP is interested in finding distributors for Macpac's clothing and footwear in the US and beyond. Again, this is a strategy that appears to be working for Lorna Jane.

"We like vertically integrated brand stories with heritage. Lorna Jane has that and Macpac certainly has it as well," Readdy adds.

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• Topics
• Buyouts
• Australasia
• Consumer
• Consumer
• buyout
• Australia
• New Zealand
• CHAMP Ventures