Yet another iconic Kiwi brand will now be owned on the other side of the Tasman, as Australian company Super Retail Group buys Macpac for NZ$144 million.
With humble beginnings in 1973 as hiking packs being made from founder Bruce McIntyre’s Christchurch garage, Macpac now has 54 stores across New Zealand and Australia offering primarily own branded outdoors apparel, equipment and accessories.
Super Retail Group, which also owns BCF, Rays, Rebel and Supercheap Auto retail brands, will take over the Macpac brand after five months of consideration.
This announcement comes just a few months after US retail giant VF Corporation also acquired a New Zealand outdoor apparel label, Icebreaker, for an undisclosed sum in November 2017.
The Group’s managing director and CEO, Peter Birtles, says that “the acquisition of Macpac and the acceleration of the adventure outdoors retailing strategy is consistent with the Group’s strategy of providing solutions and engaging experiences that inspire its customers to enjoy their leisure time.”
Macpac will be consolidated with Super Retail Group’s existing brand, Rays, in an attempt to position Macpac as the leading outdoor adventure specialist across Australia and New Zealand.
The combined businesses, under the Macpac brand, will include small format stores focusing on apparel and large format stores retailing an extensive range of apparel, footwear, equipment
and accessories, as well as a digital channel offering the complete range.
Birtles believes that, “Super Retail Group will be able to leverage its capabilities in supply chain, marketing, procurement and retail operations to add value to Macpac, while Macpac’s capabilities in design and apparel sourcing will add value to BCF and Rebel.”
Super Retail Group’s investors don’t appear to share Birtles’ confidence, with shares dropping as much as 15 percent since the announcement, their lowest levels in over two years.
Analysts have also questioned the debt-funded acquisition, as the outdoor retail category has had equivocal results for the group in the past.
However, the Australian outdoors retail market is estimated to be circa A$2.2 billion, and market research and the trial of the Rays business has confirmed the opportunity for a big box specialist retail business.
Macpac is estimated to generate sales of about NZ$95 million in the year to 31 March 2018. Total sales growth in the nine months to 31 December 2017 were 20.9 percent.
The acquisition is expected to become effective on 31 March of this year and generate mid-single digit earnings per share.