Robust sales for the Fjällräven brand enabled the Fenix Outdoor International group to deliver ample sales and profit gains last year, in spite of the warm weather in the last quarter. It marked the end of a year in which the Swedish group acquired another dimension, ending up with a share of 60 percent in the Frilufts Retail Europe group combining its Swedish and Finnish stores with Globetrotter in Germany. The newly-acquired part of the retail business is to be consolidated from this year.
The Fenix group managed to lift its consolidated sales by 7.3 percent to €55.6 million in the last quarter of 2014. A small dip in the group's retail sales was more than compensated by a sizeable increase in the sales of the Fjällräven brand, performing more strongly than other group brands such as Hanwag, Brunton, Tierra and Primus.
The turnover of the Fenix brands for the quarter amplified by 15.1 percent to €35.8 million. As in previous quarters, the growth was driven by the Fjällräven brand, while sales for the other brands were stable.
Sales for the brand shrank by more than 30 percent in Sweden for the quarter but they advanced slightly in other Nordic countries and more so in other markets. As in previous quarters, the rise was most spectacular in North America, where sales soared to €7.5 million, compared with €4.3 million for the same quarter last year.
The quarterly operating profit for the brands was down by 25 percent to €0.6 million. The company said this was chiefly due to the fact that marketing and sales-related costs shifted toward the last quarter.
Meanwhile, retail sales were down by 4.8 percent to €19.8 million for the quarter, with small declines for Naturkompaniet in Sweden and Partioaitta in Finland. The company appeared more concerned about the weak trend in Finland, where sales slumped by 4.2 percent to €6.8 million for the last quarter, amid warm weather and late snow that affected much of the sports retail business in Finland. The decline was comparable in Sweden, where the group's retail sales dwindled by 5.1 percent to €13.0 million.
The operating profit for the group's retail business was down by 16.7 percent to €2.0 million. The group pointed out that the retail segment had been charged with expenses relating to the setting-up of the Frilufts group.
The entire Fenix group's operating profit shrank to €0.5 million for the three months, down from €2.4 million. This was attributed to higher marketing costs for the brands as well as higher costs in group-wide functions. Fenix ended the period with net profit of just €0.2 million, compared with €2.2 million for the same three months the previous year.
The group's resilience in the last quarter enabled Fenix to deliver a consolidated sales increase of 12 percent to nearly €237.3 million for the entire year. The turnover for the brands shot up by 17.9 percent to €171.7 million, driven by the Fjällräven brand's strong position in Europe as well as its fast-growing development in North America and gains in Asian markets. Sales of the group's other brands were stable for the year.
For the entire year, brand sales were up in all regions. They inched up by 1.7 percent to €12.0 million in the Swedish market and by 4.5 percent to €30.3 million in other Nordic markets. The growth was more robust in Germany, where sales of the group's brands were up by 14.1 percent to €47.0 million. The Benelux countries contributed a sales jump of 21.7 percent to €17.4 million and sales in other European countries advanced by 18.4 percent to €28.3 million.
As reported in some detail last year, sales in North America have been bolstered by store openings and a marketing campaign. They moved up by 45.4 percent to €27.2 million for the year. Other markets added €9.5 million, which was an increase of 41.8 percent.
Meanwhile, the Fenix group's retail sales slid to €65.6 million, which was a drop of 1.1 percent for the year, despite a larger number of stores. The group ended the year with 46 stores, one more than the previous year and the number of mono-brand stores run by the company soared from five to 13.
The performance was roughly the same across Sweden and Finland. Sales were off by just 0.9 percent to €43.1 million in Sweden and by 1.3 percent to €22.5 million in Finland.
The decline was steeper for the operating profit of the retail division, which was more than halved. It ended the year at €1.7 million, down from €4.2 million. This was blamed on the warm winter, and was aggravated by the weak economy in Finland. This not only impacted sales but weakened the gross margin. This came at a time when costs also increased compared with the previous year, with more spending on IT infrastructure and marketing. Costs relating to the acquisition of Globetrotter again impacted this profit.
The group still managed to lift its operating profit by 12.4 percent to €33.6 million for the year. This includes one-off costs of about €0.8 million for the company's formal move from Sweden to Switzerland. Although a few people have been hired for corporate functions in Switzerland, Fenix continues to operate from Sweden. The group ended the year with net profit of €26.4 million, which was an increase of 18.4 percent.