Case study Odlo

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The company

Odlo is an established designer, manufacturer, and distributor of functional sports clothing made from synthetic fibers. Its product range for men, women and children includes sports underwear and multi-layer sportswear for running, fitness, outdoor and cross-country activities.

Why we invested

  • Strong brand with significant market share in European functional underwear
  • Well placed to benefit from the continued shift from cotton to synthetic fibers
  • Long history of organic revenue growth and attractive margins
  • Potential for operational improvement
Year of investment

2006

Sales (LTM to December 31, 2009)

CHF159.6m

Status

Exited, 2010

Building a better business

Following TowerBrook’s investment in Odlo, an experienced Chair was appointed and significant management changes took place, including the appointment of a new CEO.

Opportunities were identified to reduce costs by shifting production, streamlining marketing costs, reducing general and administrative expenses, and improving financial and operational reporting systems, thereby allowing the Board better visibility ahead of key decisions. The business exited its non-core subsidiaries, and a complex tax restructuring was successfully completed.

A ‘one-brand’ strategy was implemented which enabled simplification of the product range and more focused marketing. Odlo focused on high retail sales growth, opening new stores in carefully selected retail locations that produced the highest returns. Strong cash flow generation, growing earnings and good relationships with its financing banks allowed Odlo to refinance its bank debt in 2008 despite a difficult market environment.

Odlo pioneered the three-layer principle in sportswear. The first layer, the underwear, is designed to ensure optimum moisture management. The second layer helps to regulate the wearer’s temperature, while the third layer provides protection from wind and rain.

In 1963 Odlo’s founder developed a warm, stretchy, high-performance suit for cross-country skiers and speed skaters using Helanca synthetic fiber. The Norwegian Olympic team wore the revolutionary new clothing at the 1964 Winter Games in Innsbruck, and by the time the Winter Olympics in Sapporo came around in 1972 there were 22 national teams competing in Odlo gear.