Effective May 1, Henrik Bunge will be the new chief executive of Peak Performance. The 38-year-old currently acts as the managing director of Adidas Group Nordic. Adidas has yet to name a successor to Bunge.
The appointment of Bunge at Peak Performance came after the Swedish brand had recruited Tobias Sachs for the position of the sales director, effective Feb. 29. After six years in various sales positions with Peak, he has been directing the sales at J.Lindeberg since 2008. The position of the sales director remained vacant for quite a while after the departure of Stefan Wahlén, who switched to Wolsey. The job has been executed on an interim basis by Jari Tanninen, the head of Peak's Finnish operations.
On an interim basis as well, Peak Performance as a whole has been led by Ann Larsson, chief financial officer, since last September, when the former chief, Jonas Ottosson, quit the company over strategic disagreement with the Danish parent group, IC Companys. Ottosson, who joined the brand in 1989, steered the company from 1999, shortly after the acquisition by the Danish group then known as Carli Gry.
Even though Ottosson more than quadrupled Peak's sales to about 1.3 billion Swedish kronor (€147.4m-$188.7m) during his long rule, the parent company saw more potential, especially when it comes to casual wear, which contributes only 30 percent of the sales compared with active wear's 70 percent.
However, it appears that the split between Ottosson and IC Companys was chiefly caused by strategic disagreements over the means to expand the brand. After more than one year of preparations, a new strategic plan was unveiled by Peak Performance in May, which apparently failed to convince IC Companys. The Danish owner is seeking faster turnover growth for Peak Performance, but there were fears at the company that this might hurt the brand and its profit margin.
Meanwhile, IC Companys has issued a profit warning after being hit by warm weather and poor consumer confidence. The company reported flat sales and a decline of nearly 45 percent in its operating profit for the first half of its fiscal year, until the end of December. In a conference call after the warning, IC Companys' managers said that Peak Performance was particularly exposed to the unusually warm weather in some of its largest markets.
Just a few weeks ago, while discussing its performance in the first quarter of its fiscal year, IC Companys warned that it suffered a dramatic downturn in consumer spending in large European markets, and that the situation had worsened at the start of its second IC Companys had to swallow what its managers described as a “deadly cocktail,” mixing a decrease in sales with a hike in cost prices and disastrous levels of consumer confidence,. Due to the warm weather, discounts were most aggressive for skiwear and other outerwear in Scandinavia. The company's same-store sales declined, and they were hit by more cancellations and returns on the wholesale side. Furthermore, the low traffic meant that IC Companys had to support its sales and its market share with more investments in marketing. The situation was particularly dramatic in Poland.
IC Companys predicts that the market situation will remain tough for the remainder of its fiscal year, until the end of June. However, the impact of weak sales and cost increases should be partly mitigated by cost cuts, which the group started to accelerate a few weeks ago. They should reduce costs by about DKK 40 million (€5.4m-$6.9m) in the second half (more in SGI Europe).