The concentration of European outdoor retailing is continuing apace with the acquisition of Friluftsland, one of the leading Danish outdoor retailers, by the owner of Globetrotter in Germany, Naturkompaniet in Sweden and Partioaitta in Finland.
Just a few weeks after the A.S. Adventure Group bought McTrek in Germany, the Fenix Outdoor Group has agreed to purchase a Danish retail company encompassing seven multi-brand Friluftsland stores, along with a The North Face and a Fjällräven store. They jointly generate an annual turnover of about €15 million, making Friluftsland one of the three leading specialists in Denmark along with Spejder Sport and Eventyr Sport.
Frilufts Retail Europe, the retail arm of the Fenix group, has agreed to buy all of the shares in Friluftsland from Niels Knudsen, who established the company as a student in 1980. The founder and chief executive is to remain on board with the Danish management team, while the management of Frilufts Retail Europe will also remain unchanged.
With Friluftsland, the retail group formed by Fenix has 69 stores in four countries, along with online retailing. The entire group would have reached pro forma sales of about €273 million last year. This compares with pro forma sales of €564.7 million for the A.S. Adventure group in 2016. With the acquisition of McTrek and its 39 stores, the A.S. Adventure group has grown to 256 stores in seven countries.
The latest deal does not include another business owned by Knudsen, Fritidsagenten, which operates as the Danish distribution partner for a handful of outdoor brands. The North Face is a key brand in the portfolio, which also includes Scarpa, Cascade Designs, Teva, Nalgene and more. It's likely that the offering of Friluftsland stores will be adjusted, as Fenix is the owner of the Fjällräven, Hanwag, Tierra and Brunton brands.
Knudsen said he decided to sell because the concentration of the European market and competition from online retailers, among other factors, made it easier for Friluftsland to become part of a larger group. It has to deal with competition from hard-nosed sports retailers such as XXL Sport & Villmark, which moved into Denmark with an online store last year, along with online retailers such as Zalando. While Friluftsland is a leading player in the Danish outdoor market, it was small in the wider competitive landscape.
Knudsen attempted to branch out into Sweden a few years ago with the acquisition of two stores trading as Outside in Malmö and Lund. Friluftsland went on to purchase Playground, a Swedish online retailer with a store in Stockholm. However, all three of the Swedish stores were closed down, the last one of them in 2015. The costly failure of Friluftsland's attempt to gain size from its small market in Denmark made it all the more compelling to join a big international group.
Knudsen said he had resolved to start an outdoor retail business when he was a boy scout and was disappointed with service at Spejder Sport, where he bought his equipment. The retailer's steady expansion was interrupted by the unprofitable investment in Sweden, but it has picked up again in the last two years, and the stores are profitable. Knudsen said the Danish market has been growing due to increasing participation in outdoor activities and travel.
The transaction is expected to close in early October with a minor impact on the Fenix group's results for this year.