Globetrotter's sales slipped by about 4.3 percent to €178.3 million last year but the adjustment of its cost base led to improved returns and helped the entire Fenix Outdoor International group to more than double its net profit.
Globetrotter, the leading outdoor retail chain in Germany, is one of the retail operations of the Fenix Outdoor group, which further comprise Naturkompaniet in Sweden and Partioaitta in Finland. Due to favorable weather, the two Nordic outdoor retail chains started the last quarter strongly, but their growth was weaker than projected during the holiday season.
The Fenix group said Globetrotter reached its targets in terms of sales and costs for the quarter. The group has identified potential for more savings and more efficient operations. Martin Nordin, the group's chief executive, said in a statement that the priority at Globetrotter for this year is to increase sales and to focus on the cost of key processes. He indicated that this could be achieved at least partly through increased coordination within the group.
The Frilufts division of the group, comprising the Fenix group's retail activities in the three countries, chalked up sales of €68.0 million with 58 stores in the last quarter, up by 1.6 percent. Their operating profit reached just €2.0 million, compared with €0.1 million for the same three months of 2015.
The trend was flatter for the whole year, as Frilufts' revenues reached €258.3 million. Apart from the decline at Globetrotter, sales jumped by 12.3 percent to €54.7 million in Sweden and they were up by 5.0 percent to €25.3 million in Finland. The operating profit for the retail division swung from a loss of €6.7 million to a profit of €6.9 million last year.
The Fenix Outdoor group's Brands division, which comprises its wholesale business, advanced much faster. Covering Fjällräven, Tierra, Primus and Hanwag, the Brands unit the year with a strong quarter, raising its sales by 29.3 percent to €25.6 million. The operating profit for this unit nearly doubled to €6.0 million for the three months, up from €3.2 million.
The Brands division managed a sales jump of 17.7 percent for the whole year to €103.0 million. It was driven by Fjällräven, which continued to move into more markets. The Swedish-based brand is enjoying robust demand for its daypacks and increased sales of pants and jackets.
Nordin said that the Tierra brand of outdoor apparel is making significant progress. It remained loss-making but Nordin expects it to contribute to the group financially in the short term. Primus,which specializes in outdoor cookware, had a tough year, due to issues with its supply chain that led to lost sales and financial repercussions. Brunton has been under pressure as well, due to a decision to close down its portable power category and focus entirely on precision compasses – leading to significant write-offs of products.
The revenues of the Brands unit for the year were up by 22.0 percent in Sweden to €19.4 million and by 21.7 percent in Germany to €50.4 million. They were slightly down in the Benelux countries but on the rise in other European countries other than Sweden, as well as in North America and other international markets. The Brands division's operating profit for the year soared by 26.1 percent to €44.0 million.
The Global Sales unit of Fenix Outdoor group, comprising sales to distribution companies that market more than one brand, raised its turnover by 18.4 percent to €27.6 million for the last quarter, yielding a flat operating profit of €3.0 million.
For the full year, this Global Sales unit saw its turnover advance by 19.9 percent to €122.9 million, with increases across all regional markets. The increase was largest in European countries other than the Nordics, Germany, Switzerland and the Benelux countries. The turnover went up by 22.3 percent to €27.4 million in this “other Europe” area. The operating profit of the Global Sales unit reached €17.5 million for the year, up from €12.4 million.
All in all, the revenues of the Fenix Outdoor group rose by 10.1 percent to €123.6 million in the final quarter of 2016. Its operating profit reached €9.6 million, up from €5.0 million for the same period of 2015. Fenix more than doubled its net profit for the quarter to €12.5 million.
For the year, Fenix Outdoor accumulated sales of €496.2 million, up by 8.0 percent from 2015. Operating earnings jumped by more than 85 percent to €60.5 million, leading to more than doubled net profit of €48.2 million, compared with €21.8 million in 2015.
The results meant that the group reached an operating profit margin of 12.2 percent for the year, surpassing its long-term target of 10 percent. Yet Nordin said that the group is continuing to work on efficiency and savings, and that it has to deal with challenges accompanying its growth. Among other issues, the group has to make sure that new staff adhere to its approach on issues such as cost control. It also has to make sure that the growth spreads across the whole range, particularly in new markets. The group's progress in Canada was described as an example of a market where Fenix is approaching balanced sales, aided by its three directly managed stores in the country.