TORONTO — The head of Canadian Tire Corp. Ltd. called its $985-million acquisition of Helly Hansen a "major step forward" for its brand strategy, as the Norway-based maker of outdoor clothing will bolster offerings across a number of categories at both its Canadian Tire and Mark's stores.
CEO Stephen Wetmore said Thursday that Helly Hansen's outdoor adventure, sailing, skiing, casual and industrial wear is "very familiar territory" for the company.
Toronto-based Canadian Tire identified the Norwegian brand as an acquisition target after it established its consumer brands division, seeing it as an opportunity to strengthen some of its most "strategic and brand sensitive categories."
"The journey wasn't easy and worthy pursuits rarely are. It took us 18 months to get to today. And while we would have liked to have been faster, the result was worth the wait."
The Helly Hansen brand aligns with Canadian Tire's and presents opportunities across a number of categories, including camping, hunting and fishing, he added.
The retailer also said it has had a long history with Helly Hansen as one of its largest customers.
Under the deal for the company controlled by the Ontario Teachers' Pension Plan, Canadian Tire also assume $50 million in debt.
Helly Hansen CEO Paul Stoneham and the management team, based in Norway, are expected to continue to lead the business.
"CTC provides us with the ideal platform to further accelerate our growth trajectory and also strengthen our Canadian presence. This is a great opportunity for Helly Hansen and our team," Stoneham said. "As a Canadian, I am particularly proud to say that Canadian Tire is the new home for Helly Hansen."
The deal, which is expected to close in the third quarter of this year, was announced as Canadian Tire reported its first-quarter profit slipped compared with a year ago due to one-time accelerated depreciation charge.
Canadian Tire reported a profit attributable to shareholders of $78 million or $1.18 per share for the quarter, down from $87.5 million or $1.24 per share a year ago.
Revenue totalled $2.81 billion, up from $2.72 billion in the same quarter last year.
Consolidated same store sales were up 5.2 per cent in the quarter as Canadian Tire gained 5.8 per cent, Mark's added 3.4 per cent and FGL, which includes the Sport Chek banner, gained 3.9 per cent.