Finnish tackle company Rapala VMC reported a sharp rise in first-half net sales driven by strong demand for fishing gear from new anglers and faster-than-expected implementation of its restructuring strategy. Sales for the six months to June 30 increased 36 percent to €159.6 million as fishing’s popularity as a Covid-safe activity led to a surge in demand for Rapala’s products. Operating profit was 0.8% lower at €26.3m. However, it warned that 2022 orders would be hit with retail activity in Europe already decreasing as lockdowns eased and people resumed their pre-pandemic recreational pursuits.
“The general market sentiment in the overall industry is expected to cool down significantly also in North America with a short delay compared to Europe. However, private investments into fishing boats and global trends in outdoor and sport fishing are expected to take the fishing market to a somewhat higher level than prior to the pandemic,” Rapala said.
Sales in North America were up 73 percent to €69.9m, driven by “exceptionally strong” demand for fishing gear. Regional distribution centers operated at full capacity compared with pandemic-forced shutdowns a year earlier. Nordic sales were up 13 percent to 25.3m as good winter conditions boosted participation in ice fishing. Rest of Europe sales rose 13 percent to €46.8m, with demand starting to recover despite government restrictions continuing in some of the region’s biggest markets. Rest of World sales rose 38 percent to €17.6m.
Under Rapala’s restructuring plan, its plant in Batam, Indonesia, was closed in seven months and below budget, while the consolidation of its Nordic distribution centers was 21 months ahead of schedule. The new centralized distribution center in Estonia had also opened.
Rapala said it had already cut “a significant number” of stock lines (SKUs) in Europe and globally in soft plastic categories with further reductions scheduled for all other regions and categories “to execute the largest … clean-up in the company history”. “Additionally, we will consolidate our brand portfolio to favor future winners. We are preparing for massive marketing campaigns ahead of the launch of Okuma rods, reels and combos in Europe in 2022,” the company said.