Arc’teryx Sparks Controversy Over Tibet Fireworks, Sales Remain Strong

On the weekend, a fireworks display in the Xizang Autonomous Region sparked controversy, with some customers threatening to boycott the brand due to environmental concerns. Despite this, early assessments suggest that the outdoor apparel company’s sales have remained largely unaffected so far.

Although the company issued an apology yesterday, some shoppers expressed disapproval to Yicai, calling the campaign surprisingly insensitive. Others emphasized the importance for brands to be more cautious with marketing stunts, particularly regarding environmental approvals and artistic boundaries.

Last yesterday, a Yicai reporter observed many customers browsing or trying on items at the company’s two-story store in the Bailian Outlets Plaza located in Qingpu District, Shanghai. The shopper demographic leaned more male than female, and over just half an hour, two purchases were made.

Customer traffic over the weekend was consistent with usual levels, and there is no indication of any negative effects from the fireworks event, according to a store employee. Current discounts range from 10% to 30%, and no new directives have been received from corporate headquarters about further markdowns.

The Finnish parent company, which owns a controlling stake through a consortium led by a Chinese sportswear giant, does not publicly share revenue figures for individual brands. In 2024, the parent company reported total revenue of USD 5.1 billion, with its outdoor apparel division, mainly centered around this brand, experiencing a 36% increase year-over-year to USD 2.1 billion. This division became the company’s top-grossing segment.

Regionally, the Helsinki-headquartered parent company earned USD 1.2 billion in China last year, compared to USD 1.8 billion in the Americas, the largest market. Europe, the Middle East, and Africa generated USD 1.5 billion.

However, the landscape shifted this year. Revenue in China jumped 42% year-over-year in the second quarter to USD 410 million, surpassing the Americas, which grew modestly by 6% to USD 395 million. Revenue from the EMEA region held steady at USD 276 million.

The company plans to reduce the number of outlets in China this year, including closing some long-standing partner stores and factory outlets, according to Zheng Jie, CEO of the parent company, during the second-quarter earnings call.

While some legacy partner stores and factory outlets will shut down, the brand remains committed to enhancing its presence in China by opening larger, more upscale stores that generate higher sales per square meter. Future strategies include cutting back on discounts and scaling down outlet operations, Zheng added.