Fenix Outdoor International had a tough year in 2020 due to the pandemic and its store closures, with sales falling by 7.3 percent to €563.0 million. The operating margin (Ebit) contracted by 3.1 percentage points to 10.9 percent. Net profit declined by 44.6 percent to €33.9 million.
But in its annual report, the group is optimistic about the prospects for 2021. It said it will focus on investments to develop e-commerce while improving rental costs for the retail business. It will expand its Frilufts’ digital business into at least two more European markets in 2021, although it did not say which ones. It has not released any formal guidance but said that the preorder book is indicating a good year.
In 2021, the company is opening two of its next-generation retail stores, one in Boston and one in Seattle. It will also expand its categories, starting with the addition of underwear, which will be coming in late August when the ReadyDry Essentials collection is dropping. It is also launching Naturkompaniet in Norway, with both e-commerce and brick-and-mortar stores.
However, the management admitted that the beginning of 2021 has meant some delay in its anticipated recovery. Some key markets are still facing shop closures, which means that it will be facing consequences in that part of the business further into the year than anticipated, especially in Germany and Netherlands. German retailers, with a substantial digital presence, are able to take delivery of the preorders for the spring, whereas the mostly brick and mortar-based retailers are pushing those deliveries into late March or April.
The digital business has contributed to compensate for lost brick-and-mortar sales in Sweden and Finland, where no major closures occurred. Denmark is open again and looks promising, the company said. Some markets starting to recover, such as North America and Norway, and Fenix is starting to prepare for the return to a more normal business operation.
While it believes that it will be a staggered return to normal, with travel struggling during the whole of 2021, it is hopeful that North America and Asia, including China, will drive sales this year. The major concern is Europe, besides the U.K.
The group is looking to benefit from efforts made in 2020 on the direct-to-customer omnichannel approach. The first step was to launch completely new websites for its brand in the U.S. and Europe. A new platform was used with increased functionality, easier navigation, enhanced integration, which led to better conversion and sales. Now, the management is looking at adding additional brick-and-mortar locations, with seamless omnichannel capabilities. It has built its next-generation retail store concept and during the summer, opened a Royal Robbins flagship retail store in Denver, Colorado.
Besides Royal Robbins, the Brands division includes other house brands like Brunton, Hanwag, Fjällräven, Primus and Tierra. For the full financial year, the division recorded a sales drop of 9.3 percent to €149.4 million, while the operating profit fell by 19.5 percent from the previous year to €50.5 million.
Fenix’ Retail division, Frilufts, posted an operating loss of €1.6 million, compared with a profit of €2.8 million the year before, on 6.4 percent lower revenues of €264.0 million. Besides Globetrotter in Germany, the division includes three other chains of multi-brand outdoor stores: Naturkompaniet in Sweden, Partioiatta in Finland and Friluftsland in Denmark.
Fenix also has a Global Sales division that manages subsidiaries selling more than one of its brands. The division’s sales decreased by 6.4 percent for the year to €149.6 million, generating a drop of 7.6 percent in operating profit to €24.4 million.
Fenix pointed out that its financial position remains strong, with higher consolidated cash of €191.1 million.