Faction, World’s Fastest-Growing Ski Brand Targets IPO

Faction Skis is pleased to announce that it has closed £2m of a £4m round for the fastest-growing global ski brand. In a multi-billion euro market with 40% year-to-date sales growth and expansion into Alpine outerwear with a trade launch this month. Unusually, Faction designs and makes some of the best skis in the industry, with 30,000 pairs sold across 35 countries in 2018. The company produces skis in their Verbier factory, in contrast to many other gowing big mountain brands which outsource production. Having their own factory gives Faction direct control over product quality.

Faction is on a steep growth trajectory with rapid growth and industry-leading margins suggesting a €100m valuation at standard revenue multiples within four years.

• Market demand for ‘Mass Premium’ offering quality and experience
• Media House: Award-winning film production team engage fans globally, with over 1m views a year through both web and cinema distribution
• Capitalising on the Chinese skiing boom where more ski resorts than Europe mandated before the 2022 Beijing Olympics for over 100m new skiers
• Sales in 35 countries, 95% managed directly
• Apparel trade launch October 2018 for consumer launch for autumn 2019

People’s focus on quality, story and experience are defining the retail and media landscape. Faction has capitalised on the gap left by generalist retailers and multi-brand conglomerates. “The middle is dead.  You either want to deliver fantastic price-point basics or differentiated premium quality with meaning today – and we’ve always focused on quality and engagement with our fans,” explains CEO Alex Hoye. “Add that to the digital and social media revolution and we have an unprecedented opportunity to change the brand landscape towards premium, innovative brands.” Companies like Faction do not rely on television adverts because they are now content creators and publishers of their own original material and social media.

The Rise of ‘Mass Premium’

Faction’s goal is not to become a mass market player, losing margin and quality for market share ; many of its peer group are owned by slower-moving corporates. With a lean, global infrastructure, Faction can achieve scale with strong profit margins with less than 3% market share and will exceed its ambitions if fans continue to prioritise quality and experience.

Alex Hoye, CEO of Faction, commented: “We were lucky really. We built a brand with a focus on creating better, and respecting and getting involved with our fans – we call ourselves The Faction Collective. A decade later retail channels are collapsing and buyers are holding brands accountable to quality and being real, not just consumer machines. Our world-class team and investors have built a global platform the best in the industry and showcasing the best people on skis in our creative on media with humbling response from Tirol to Tokyo.

The five-year plan has Faction growing to only 64,000 skis for season 2022-2, although our forecasts do not take the significant opportunities in China into account. We are thrilled by our expansion into outerwear for the 2018-9 season – Faction Wear: Gear for Alpine Living.”

Chinese Skiing Boom

The Chinese ski industry has been expanding rapidly, making it the biggest growth driver for the ski industry globally.  Faction is already established as an aspirational brand in the Chinese market, the first AFP-sanctioned (Association of Freeskiing Professionals) freeski competition in China was co- sponsored by Faction and won by Faction Olympian Alex Hall. The Chinese skiing boom has already fuelled the construction of more than 700 domestic indoor and outdoor ski resorts. In the lead up to the 2022 Beijing Winter Olympics, President Xi Jinping has stated his intention of 20% growth in skiers each year reaching over 100 million by the Games, and 300 million skiers by 2030.

Identifying the Chinese opportunity, the French winter sport equipment company Rossignol Group partnered with the leading foreign investment firm in China, IDG Capital ahead of the Beijing 2022

Olympic Games and global market leader Amer which owns Atomic and Salomon Skis received a $5.5 billion takeover offer from Chinese athletic brand Anta.

Global Brand with Native Sales Teams

Their global sales force, and their ecommerce really sets them apart, surpassing in the past two years mid-sized competitors such as Scott, Black Diamond, Kaestle, and Movement due to their global reach. The sales force and ecommerce are managed locally in key markets, with strong retail partners offering local service, knowledge and awareness.

Superior Quality

Seven of 23 finalists in the women’s slopestyle competition in South Korea rode Factions including gold and silver medallists. Faction also produces and sells Roxy skis for Quicksilver, which is testament to their quality and that global brands have taken notice of Faction’s excellence. Faction has relentlessly innovated with advanced materials to create the best products and experience in the industry.

The Greatest Skier of All Time – Candide Thovex

In skiing, Candide is known as the G.O.A.T. – Greatest of All Time. As a Faction athlete and shareholder, his creative productions generate immense awareness for Faction with over 100 m views on his One of Those Days and Ski the World, and 1.5m Facebook & Instagram followers. He boasts seven Cannes Lion Awards, which demonstrates his immense marketing talent. Last season Faction had a 300-stop,

32-country film tour filling 1,800-capacity cinemas to universities, with 1m digital views of all content. The next Blockbuster is in production for an autumn 2019 launch in cinemas.

Fundraising and The Roadmap to IPO

Faction is striving to be retail investment ready with over 400 shareholders already, and is currently focused on a new round of capital raising. The CEO, Alex Hoye has NASDAQ and AIM experience and has established a senior management structure and lean team combining decades of experience with a drive to create better and engage people around the world.

They are now nearing key thresholds of €10m in revenues and accelerating growth and are considering selective acquisitions which could benefit from Faction’s global sales and media reach. Having invested in a strong foundation, the focus is now shifting to profit margins, and the management team is driving to a goal of a public listing in 2022 and has been accepted into the London Stock Exchange ELITE programme.