Bergzeit is set to reach sales of more than €50 million for the fiscal year until the end of February, and large-scale investments in infrastructure and marketing should support plans to expand sales at an annual rate of at least 20 percent in the next few years.
The German online outdoor retailer, which is owned by Italy's Sportler chain of sporting goods stores, is anticipating a sales increase of about 15 percent for the current fiscal year. The cold weather in the German-speaking countries in December pushed up sales by about 50 percent for the month but the trend flattened in January, which saw strong demand last year.
The growth made it indispensable for Bergzeit to move into larger premises in the small town of Otterfing in southern Germany, as it was running out of space for its 215 employees and physically unable to hire more. Its warehouse space roughly doubled to 8,000 square meters in August and the surface of its offices more than tripled to 2,500 square meters in October. These measures together cost about €13 million, partly financed by Sportler and by Bergzeit.
At the same time, Bergzeit updated its branding and upgraded its technology, making sure for example that the layout of the website automatically adjusts to the format of the user's screen.
While the retailer has yet to invest in more substantial automation, its larger and more efficient warehouse already enabled it to break records of shipments per day in the ultra-busy month of December. The target is to eventually fulfill about 95 percent of deliveries the day after the order, which Bergzeit already achieves in ordinary business periods. The extra office space will allow the company to hire staff for customer service, logistics and marketing – probably about 40 more employees this year alone.
As part of the growth plans driven by Maximilian Hofbauer, who became chief executive in 2015, Bergzeit wants to expand its international reach. About 85 percent of its sales are currently generated by the German-speaking countries, with the U.K. and the Benelux countries as the largest other European markets. Bergzeit intends to invest in these markets as well as France and Italy. Spain remains a more distant prospect, due to the tough price competition among online retailers.
The online retailer's strategy is also putting more emphasis on its specialist offering in the mountaineering category. It has been investing to reinforce its positioning in the relevant community, through the editorial contents on its website as well as its two stationary stores and growing involvement in offline events. The company has no firm plans to open stationary stores in other countries as yet, but it wants to get immersed in targeted markets through events and potentially marketing offices.
The rise in sales for the current fiscal year has been driven by active sports categories such as mountain running and cross-country skiing. Bergzeit moved into this category in the last winter season to complement its offering in ski touring and freeriding, while it decided to stay out of the alpine ski business. Another category that performed strongly was cycling apparel, footwear and accessories, which Bergzeit has been covering more intensely since it pulled out of the market for bicycles in 2016. The sales growth was above average for footwear, which makes up about 15 percent of the retailer's turnover, compared with 50 percent for apparel and 35 percent for equipment.
Among the most popular brands on the website are Ortovox, La Sportiva and Petzl, which have worked out productive partnerships with Bergzeit. Sales have been less buoyant for several other leading outdoor brands that have been aggressively developing their own online sales in the last years.