Despite rough competition in Scandinavia and unfavorable weather at the end of the year, the Fenix Outdoor Group lifted its turnover by 8 percent to 1,865.7 million Swedish kronor (€210.7m-$293.7m) last year. The improvement was publicized just before the company finalized its already reported acquisition of a stake of 20 percent in Globetrotter, the big German outdoor retailer.
Fenix achieved the sales hike last year in spite of the mild weather in the Nordic markets, where winter didn't properly arrive until after the festive season. The group still lifted its turnover by 15 percent to SEK 469.7 million (€53.0m-$73.9m) for the last quarter. Exchange rate changes did not have any significant impact for the year.
The group ended the year with an operating profit of SEK 259.4 million (€29.3m-$40.8m), which was an increase of 12 percent. Fenix said the operating margin had advanced despite one-off costs related to structural changes to make Hanwag more efficient, investments in Fjällräven's international expansion and Brunton's ongoing transformation. The net profit reached SEK 192.9 million (€21.8m-$30.4m), up by 24 percent.
Sales of the group's brands, from Fjällräven to Hanwag, Primus and more, jumped by 11 percent to SEK 1,264.4 million (€142.8m-$199.0m) for the year with increases in all regional markets. The group's operating profit for the sales of its brands increased by 8.7 percent to SEK 259.8 million (€29.3m-$40.9m).
Meanwhile, retail sales by Naturkompaniet in Sweden and Partioaitta in Finland increased by just 2 percent to SEK 574.5 million (€64.9m-$90.4m), with an unchanged number of 45 stores including five franchises, but their operating profit dropped by 18.7 percent to SEK 36.6 million (€4.1m-$5.8m).
The Swedish company said that the jump in sales for the brands was mostly owed to Fjällräven, which continued to expand in international markets but also did well in existing European markets. Several stores were opened in the Netherlands and the U.S., but the group pointed out that this occurred toward the end of the year so the stores did not have a major impact on sales for the entire year.
Hanwag, Primus and Tierra all turned in robust sales increases as well, while Brunton's turnover retreated a little due to a strategic adjustment, which led to a stronger focus on portable power and navigation.
Sales for all the brands climbed by 10.2 percent to SEK 102.4 million (€11.6m-$16.1m) in Sweden and by 5.4 percent to SEK 251.8 million (€28.4m-$39.6m) in other Nordic countries. They continued to increase in Germany as well, by 4.1 percent to SEK 357.4 million (€40.4m-$56.3m). Fjällräven has been enjoying growing sales in Germany in all product groups, on the back of increased exposure at key accounts.
The Fenix group's brands even saw their sales jump by 19.4 percent to SEK 123.7 million (€14.0m-$19.5m) in the Benelux countries. The company said it had made up for the lack of expansion in the Dutch market by opening its own retail activities in Amsterdam and putting more emphasis on tops. The initiatives have apparently paid off, with a strong start in the Netherlands this year and much stronger pre-orders than anticipated for the second half of the year.
Sales of the group's brands climbed by 14 percent to SEK 207.4 million (€23.4m-$32.7m) in other European countries and by 45 percent to SEK 162 million (€18.3m-$25.5m) in the U.S. market. Fjällräven has been making long-term investments in the country, with two flagship stores in New York and another three in Boston, Seattle and Boulder, where the company has its warehouse and offices. Fenix intends to open several more U.S. stores this year, probably doubling the number, and it has started to get orders from key accounts in the country.
Other markets accounted for sales of SEK 57.7 million (€6.5m-$9.1m) for the brands, which is an increase of 45 percent. Sales are continuing to expand steadily in China, albeit in a very controlled way. The brand's expansion in the U.S. market has helped Fjällräven to gain ground in South Korea as well. It has opened several shop-in-shops in department stores and a store for Fjällräven, Hanwag and Primus.
When it comes to the group's retail operations, sales at Naturkompaniet in Sweden actually declined by about 2 percent to SEK 376.9 million (€42.6m-$59.3m) for the year. The group said it faced a tough comparison with an outstanding first quarter last year, and it managed to stay away from price battles. Trade was generally a little slower in the last quarter, probably due to the weather, leading to a lower conversion per customer.
Sales at the Partioaitta chain in Finland increased by 10.6 percent to the equivalent of SEK 197.6 million (€22.3m-$31.1m). The company said that, amid growing competition in both markets, Partoiatta and Naturkompaniet had upheld their market share in their respective countries.
Fenix has been selling products in the U.S. online for quite some time, but the group launched its own online store for Fjällräven in Europe last September. The wevsite is available in seven languages, with logistics organized from a dedicated floor at the central warehouse in Almere, in the Netherlands.
The opportunity to buy online is pushed much on the Fjällräven website, which more immediately draws attention to local retail partners. Still, a few weeks ago, the company had already shipped to more than 1,000 different municipalities across Europe, and with a very wide assortment. The group wants to continue selling its brands through a combination of own stores, physical or virtual, and specialist retailers who have the knowledge and right customer base to introduce technical products.