Helly Hansen to grow in the U.S. as Kontoor targets expansion and margin gains
With Kontoor Brands finalizing its acquisition of Helly Hansen, the American apparel group—owner of Lee and Wrangler—is integrating the Norwegian outdoor brand into its global portfolio and laying out plans for expansion and profitability. Kontoor expects Helly Hansen to improve its margins by tapping into the group's operational infrastructure.
During Kontoor's first-quarter earnings call, CEO Scott Baxter outlined four strategic priorities for Helly Hansen's future.
'First, we're accelerating Helly Hansen's growth. The opportunities are significant. The U.S. is the largest outdoor apparel and footwear market in the world. While it's currently the brand's fastest-growing market, its penetration remains well below that of competitors. By combining wholesale and retail expansion, strong digital growth, and demand-generation investments, we see a clear path to double-digit growth in our home market,' Baxter said. 'Beyond the U.S., we also see major opportunities in direct-to-consumer sales, China, workwear, and category expansion.'
Kontoor also aims to enter high-potential geographic markets while doubling Helly Hansen's operating margin to approximately 15%. Using its own global structure, the company expects to lower Helly Hansen's freight costs by 10% to 20%.
'We will leverage our global operating model, supply chain, and technology platforms. This will allow both organizations to benefit from meaningful scale advantages while enhancing operational efficiency, decision-making, and investment capabilities to support growth initiatives,' said Baxter. In the near term, Kontoor plans to boost profit and improve working capital to reduce its net debt-to-equity ratio by 50% over the next 12 months.
The company's fourth strategic focus is integrating Helly Hansen's talent and brand identity. 'We remain impressed with their organization. There's talent at every level, along with humility, drive, and a desire to do things right. These are the same qualities we value at Kontoor,' Baxter said, adding that Kontoor is the first owner of the brand in two decades with roots in the textile industry.
Kontoor expects Helly Hansen to generate $425 million in revenue during its first fiscal year under new ownership, with stronger performance forecast in the years ahead. However, the group also faces challenges related to U.S. import tariffs.
'Helly Hansen sources all of its U.S. products from Southeast Asia, including China, Vietnam, Bangladesh, and Cambodia,' said CFO Joe Alkire. 'Remember, the brand generates about 75% of its global revenue outside the United States. However, if proposed tariff rates apply across all imports, the group could face an estimated $50 million hit to its 2025 operating profit, with Helly Hansen contributing roughly $15 million to that total.'
Despite this challenge, Kontoor does not expect tariffs to derail Helly Hansen's long-term strategy, as most players in the outdoor apparel sector also rely on Southeast Asian manufacturing.
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Euronews
an hour ago
- Euronews
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'The threats facing NATO are growing and our adversaries are certainly not waiting for us to re-arm or be ready for them to make the first move," 'We would prefer our Allies move out urgently on reaching the 5%,' he told journalists in a briefing on the margins of the meetings. Ambassador Whitaker also said the US is 'counting on Europe' to the lead in providing Ukraine with the 'resources necessary to reach a durable peace' on the continent. Mark Rutte reiterated NATO's recent warnings that Russia could strike NATO territory within the next couple of years. 'If we don't act now, the next three years, we are fine, but we have to start now, because otherwise, from three, four or five years from now, we are really under threat," he said, adding: "I really mean this. Then you have to get your Russian language course out, or go to New Zealand.' 'It's good to have continuity about the US in NATO, but with Ukraine it's a different story. I just don't think Trump really cares about Ukraine," the US-based source told Euronews. 'Trump just doesn't care about Europe – it doesn't make him richer or help him politically,' the source said. Referring to the forthcoming NATO summit taking place next month in The Hague, the source said the presence of Ukraine at the summit "will likely be scaled back", since the US will say, "they're not members' so they don't need to be there". A large Russian attack with drones and missiles has hit Ukraine's eastern city of Kharkiv on Saturday, killing at least three people and injuring 21, local officials said. The barrage — the latest in near daily widescale attacks — included aerial glide bombs that have become part of a fierce Russian onslaught in the three-year-war . 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Kharkiv's regional governor Oleh Syniehubov said two districts in the city were struck with three missiles, five aerial glide bombs and 48 drones. Among the injured were two children, a month and a half year old baby boy and a 14-year old girl, he added. The attack on Kharkiv comes one day after Russia launched one of the fiercest missile and drone barrages on Ukraine, striking six Ukrainian territories and killing at least killing at least six people and injuring about 80. Among the dead were three emergency responders in Kyiv, one person in Lutsk and two people in Chernihiv. Meanwhile, the Ukrainian Air Force said it shot down a Russian Su-35 fighter jet on the Kursk front inside Russia, the Ukrainian daily Ukrainskaia Pravda reported. No more details were given immediately. U.S. President Donald Trump said this week that his Russian counterpart, Vladimir Putin, told him Moscow would respond to Ukraine's attack on Russian military airfields last Sunday with "Operation Spiderweb" In a new statement bound to cause offense in Kyiv and amongst its allies, Trump told journalists on board Air Force One on Friday evening local time when asked about "Operation Spiderweb": "They gave Putin a reason to go in and bomb the hell out of them last night. That's the thing I didn't like about it. When I saw it I said 'Here we go, now it's going to be a strike'." The European Union is readying a new round of sanctions against Russia to pile extra pressure on the Kremlin and pressure it to agree to a 30-day unconditional ceasefire in Ukraine, a step that Western allies consider indispensable for serious peace negotiations. Ursula von der Leyen has already provided an outline of what that package, the 18th since February 2022, is supposed to target: Russia's financial sector, the "shadow fleet" and the Nord Stream pipelines, which are currently non-operational. On top of that, the president of the European Commission has pitched a downward revision of the price cap on Russian oil to further squeeze profits from worldwide sales, a crucial cash flow to sustain the full-scale invasion of Ukraine. "We need a real ceasefire, we need Russia at the negotiating table, and we need to end this war. Pressure works, as the Kremlin understands nothing else," von der Leyen said earlier this week after meeting with US Senator Lindsey Graham. But there's a catch: unlike other sanctions the bloc has imposed on Russia, such as the multiple export and import bans, the price cap has a political and practical dimension that exceeds the institutional sphere of Brussels and stretches across the ocean. More specifically, to Washington, DC. The price cap on Russian oil was introduced in December 2022 by the Group of Seven (G7) under the initiative of the Joe Biden administration. It was hailed as an ingenious, ground-breaking mechanism to mobilise the collective power of Western allies and cripple Russia's high-intensity war machine. As part of the plan, the G7, together with Australia, passed laws prohibiting their domestic companies from providing services, such as insurance, financing and flagging, to Russian tankers that sold seaborne crude oil above a predetermined price. The secret lay in market power: for decades, Western firms, particularly British ones, have dominated the sector of Protection and Indemnity (P&I), a type of insurance that gives shipowners broad protection and allows them to cover potentially huge costs from any accidental harm caused to the crew, their property or the environment. 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China and India openly buy Russian crude oil, sometimes to refine it and resell it under a different label. Having the EU and the US go separate ways would further destabilise the Western alliance and create the impression of a transatlantic break-up. But for many, that is already a reality: the "Coalition of the Willing", born after Donald Trump unilaterally launched negotiations with Vladimir Putin, bears testament to the political divide. "The price cap was a G7 + EU initiative, and so in its current form, I do not see any pathway in which the EU could adjust the cap without the support of the broader coalition, including the US," said Ben McWilliams, an affiliate fellow with Bruegel. "That said, the EU is free to implement whatever measures it wants on its own domestic ships and insurance companies, which it could likely encourage the UK to join," McWilliams added. 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Euronews
7 hours ago
- Euronews
NATO allies have agreed to significant increases in defence spending
The US administration has appointed Lt. Gen. Alexus G. Grynkewich as both the next top US general in Europe as well as the SACEUR. The appointment by Trump will be especially welcomed following media reports in recent months that the US was considering relinquishing the role of SACUER which has always been appointed by a US president to NATO. "It's a very important decision and there is relief from NATO's point of view as it's a positive sign of American engagement and staffing," a US-based source familiar with the issue told Euronews. US Army General Dwight D. Eisenhower was NATO's first SACEUR in 1951, and the role has remained with the US ever since. 'Upon completion of national confirmation processes, Grynkewich will take up his appointment as the successor to General Christopher G. Cavoli, United States Army, at a change of command ceremony at the Supreme Headquarters Allied Powers Europe in Mons, Belgium, expected in the summer of 2025,' a statement from NATO read. Meanwhile, NATO defence ministers agreed to a significant surge in defence capability targets for each country, as well as moving to spending 5% of GDP on defence. They've agreed that 3.5% of GDP would be used for 'core defence spending' - such as heavy weapons, tanks, air defence. Meanwhile 1.5% of GDP per year will be spent on defence- and security-related areas such as infrastructure, surveillance, and cyber. However, the full list of flexibility has not yet been negotiated. 'These targets describe exactly what capabilities Allies need to invest in over the coming years,' NATO Secretary General Mark Rutte told journalists. The US has been pushing NATO allies to dramatically increase spending, and expects to see 'credible progress' immediately, according to US Ambassador to NATO Mathew Whitaker. 'The threats facing NATO are growing and our adversaries are certainly not waiting for us to re-arm or be ready for them to make the first move," 'We would prefer our Allies move out urgently on reaching the 5%,' he told journalists in a briefing on the margins of the meetings. Ambassador Whitaker also said the US is 'counting on Europe' to the lead in providing Ukraine with the 'resources necessary to reach a durable peace' on the continent. Mark Rutte reiterated NATO's recent warnings that Russia could strike NATO territory within the next couple of years. 'If we don't act now, the next three years, we are fine, but we have to start now, because otherwise, from three, four or five years from now, we are really under threat," he said, adding: "I really mean this. Then you have to get your Russian language course out, or go to New Zealand.' 'It's good to have continuity about the US in NATO, but with Ukraine it's a different story. I just don't think Trump really cares about Ukraine," the US-based source told Euronews. 'Trump just doesn't care about Europe – it doesn't make him richer or help him politically,' the source said. Referring to the forthcoming NATO summit taking place next month in The Hague, the source said the presence of Ukraine at the summit "will likely be scaled back", since the US will say, "they're not members' so they don't need to be there".
France 24
21 hours ago
- France 24
From allies to enemies: the cost of a Musk-Trump split
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