(Yicai) Sept. 25 -- Shares in Finnish sporting goods firm Amer Sports have slumped for three consecutive trading days as the fallout from subsidiary Arc’teryx’s controversial fireworks display in the Himalayas last weekend spreads from an environmental outcry to reach the financial markets.

The share price of Amer Sports [NYSE:AS], in which a consortium led by Chinese sportswear brand Anta owns a controlling stake, tumbled 5.82 percent on Sept. 22, 2.75 percent on Sept. 23 and 0.47 percent yesterday to close at USD34.14.

The fireworks controversy has also resulted in financial downgrades. US lender Citi lowered its target price for Amer Sports to USD42 from USD50 on Sept. 22. In its research note, the New York-based bank said that the backlash is mainly concentrated on the outdoor apparel brand Arc’teryx, and the firm’s other affiliated brands appear to be largely unaffected.

Cashing Out

Despite the recent drop, the share price has more than doubled since Helsinki-based Amer Sports went public last year with an issue price of USD13 per share, and many major stockholders are reaping the profits.

FountainVest Partners, which was part of the original buyout consortium, has pared its stake by around 35 million shares, cashing out approximately USD1.3 billion. The Hong Kong-based private equity firm still retains a 6.2 percent stake.

While Chip Wilson, the founder of Canadian sports apparel retailer Lululemon and also part of the original consortium, offloaded over 4 million shares in August for around USD159.7 million. He still holds about 18 percent of Amer Sports’ stock.

Mounting Complaints

Arc’teryx has surged in popularity among outdoor enthusiasts in recent years, but its prices have climbed just as fast. Since 2022, Arc’teryx has raised its prices several times, said Wang Jiaqi, who frequently bought the firm’s products before its takeover by Jinjiang-based Anta. In Japan alone, Arc’teryx hiked prices twice in 2023, in August and December, with the price of some products going up by as much as 25 percent in December.

This sparked criticism from loyal customers who complained online, saying that Arc’teryx is trying to position itself alongside luxury labels such as LV and Chanel, but that the quality has not improved despite the price hikes.

And the complaints are piling up. A search on Heimaotousu, a consumer service platform under tech giant Sina, found over 3,000 results related to Arc’teryx, many of which were quality issues, such as shoes coming unglued, jackets bulging and pilling, and logos peeling off clothing.

These complaints indicate that there is room for improvement in the firm’s after-sales service, craftsmanship and quality, industry experts said. With higher prices comes higher consumer scrutiny and Arc’teryx may face tougher judgement going forward.

Editor: Kim Taylor