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Tilley founder Alex Tilley in an undated photoThe Canadian Press

Premium apparel producer and retailer Tilley Endurables Inc., known for its hard-wearing sun hats, has been sold to a private-equity firm with the goal of reversing its slide in sales amid tougher competition.

Re:Capital, the Canadian arm of British firm Hilco Capital, has acquired the hat and travel apparel company for an undisclosed sum and intends to invest in bolstering the business, the company said on Wednesday.

Tilley wants to recapture the business it lost following its peak in 2006 and 2007 by expanding in the United States and Europe and capitalizing on its made-in-Canada credo, Mary Coleen Shanahan, long-time chief executive officer of Tilley, said in an interview.

"It's a challenging retail market out there," Ms. Shanahan acknowledged. "But Canadian-made goods are recognized outside of Canada as really good quality."

Founded in 1980 by entrepreneur Alex Tilley, the eponymous clothier outfitted a generation of baby boomers for their travel and outdoors activities. But as it grappled with tougher competition from cheap-chic and more stylish outdoor-fashion rivals, the company felt the urgency to find a buyer that could help put it back on a path to growth.

"Tilley peaked and now its challenge is the revitalization" of the brand, John Williams of retail consultancy J.C. Williams Group said. "It does appear to appeal to an older, more conservative crowd."

But its vintage and rugged Canadian identity is also part of Tilley's cachet, on which it could cash in globally with the right marketing, Mr. Williams said.

With about $30-million of annual sales, Tilley has struggled to regain the business its shed since the recession, Ms. Shanahan said. It has felt the squeeze partly from burgeoning cheap-chic players such as H&M, Zara and Joe Fresh, and also from retailers in the outdoor apparel sector. They include Canadian-owned Mountain Equipment Co-op and U.S.-based North Face.

For instance, sales at cheap-chic H&M Canada, owned by Swedish-based Hennes & Mauritz, grew a "mind-blowing" 19 per cent in the company's first six months ended May 31, according to apparel market researcher Trendex. During the first half of 2015, H&M Canada added two stores and ended the period with 74 stores.

For Tilley, this kind of competition can eat into its sales. Other companies have knocked off the Tilley hat, Mr. Williams noted.

Ms. Shanahan said Tilley plans to bank on its made-in-Canada business model by using that theme in its marketing. (It produces all its clothing in this country except socks, which are made in the United States.) And Tilley plans to ramp up its advertising, which it dropped about a decade ago in the United States, and social media marketing, she said.

While it already operates in the U.S. and Britain, it wants to shore up business in those markets and other European countries such as Germany, where outdoor activities are popular, she said. Tilley's U.S. and British sales have grown every year, she added.

Tilley's goods are sold in 18 countries, but has its own stores in Canada – four currently, having closed two in the past year or so, she said.

More than half of Tilley's sales are in Canada, and about a third in the United States, she said. It is aiming to more than double its export business over the next several years, she said.

"We're putting plans together now for going into new markets," she said. "Realistically it takes time to get there."

Tilley is also trying to appeal to a younger customer by to develop new styles of clothing in stretchier and lighter fabrics, she said. It is also working at adapting to changing travel habits, such as people using more cash. Its latest money belt, for example, holds 50 $100 bills while its previous one held half that many.

Mr. Tilley got the idea for the hat from his frustration with the poor design and quality of sailing hats that were on the market more than three decades ago.

From its initial adoption by sailing enthusiasts, the Tilley hat was later adopted by hikers, hunters, fishermen and even the Canadian military, the company said.

Tilley hats gained a reputation among travellers for their durability and practicality. One tale the company tells is of a Tilley hat emerging unscathed from the jaws of a lion and the digestive system of an elephant, "three times over."

The hats are made by hand in Canada in a process involving 41 steps, 23 pairs of hands and 15 pieces of fabric, the company said. Its products are stocked in more than 2,500 specialty stores in various countries. The hats come with their own user manuals and a lifetime guarantee.