Fenix Outdoor International, the owner of Globetrotter, says that restructuring measures at the German outdoor retail group are being implemented and paying off faster than anticipated, which is encouraging Fenix to start considering new store openings again.
The Fenix group, which bought out minority shareholders to acquire full ownership of Globetrotter a year ago, found structural issues that led to a one-off charge of €4.7 million last year.
The focus has been on improving purchasing, logistics and administrative procedures, while the offering was completely adjusted. Martin Nordin, chief executive of the Fenix group, says that the company is still searching for ways to make Globetrotter more efficient but the restructuring measures are moving ahead faster than predicted.
Frilufts, the retail division of the Fenix group, which comprises Globetrotter as well as Naturkompaniet in Sweden and Partioaitta in Finland, slightly raised its sales to €51.8 million for the quarter, up from €51.7 million. The increase was achieved in spite of a reduction in the number of stores from 61 to 58 (two of the three stores that are no longer in the network are franchises).
The nearly flat retail sales included increases of 16.5 percent to €10.6 million for Naturkompaniet and 13.3 percent to €5.1 million for Partioaitta, which both benefited from the cold weather in January.
Globetrotter's turnover reached €36.0 million for the quarter, down by 5.3 percent compared with the same quarter last year, which was characterized by abundant promotional activities. With fewer close-out sales this year, Globetrotter's margins have improved, and the restructuring measures have lowered structural costs. The operating loss of €2.4 million reported for the entire retail division was much smaller than the loss of €8.3 million incurred for the same quarter last year.
The whole Fenix group raised its sales by 6.5 percent to €108.4 million for the three months, driven by unabated expansion for the Fjällräven brand. The group's operating profit margin reached 11.7 percent, up from 3.4 percent, and Fenix ended the quarter with profit of €7.4 million, more than twice the profit of €3.3 million for the same quarter last year.
While the company previously reported the remainder of its activities under the “brands” division, they have been split into two. The “brands” division covers the Fjällräven, Tierra, Primus, Hanwag and Brunton entities, as well as subsidiaries selling only one of these brands. It also includes the group's own retail operations for these brands, conducted through online and physical stores in Europe and North America. Another division, “global sales,” now covers distribution companies selling more than one of the Fenix brands.
Under this split, the brands division raised its sales by 11.3 percent to €32.4 million for the quarter. Fenix said the rise was driven by the Fjällräven brand, and more particularly its daypacks. The division's gross margin was stable and it brought in operating earnings of €14.6 million, up from €12.1 million.
Sales in the brands division increased in nearly all markets. They were up by nearly 25 percent to €10.1 million in North America, which has become the second-largest market for the brands – and getting closer to the largest market, Germany, where sales were up by 2.2 percent to €14.0 million. The division's sales in Sweden advanced by more than 40 percent to €4.1 million and they were flat at €0.5 million in other Nordic countries. The division managed a sales increase of 3.6 percent to €2.9 million in the Benelux countries, but sales were halved to €0.2 million in other European countries and they were flat at €0.6 million elsewhere.
The “global sales” division saw its sales increase by 14.8 percent to €24.1 million for the quarter and its operating profit was up by €0.9 million to €3.3 million. Fenix said the increase was strongest in Eastern Europe and Asia, but the Nordic countries and the U.K. delivered strong growth as well.
The turnover of the global sales division was up by more than 15 percent to €8.3 million in Nordic countries other than Sweden and by 12.5 percent to €3.6 million in the Benelux countries. Other European countries delivered a sales increase of 12.2 percent to €9.2 million for the global sales division, and sales in other markets were up by more than 30 percent to €3.0 million.
Combining wholesale and retail, Germany remains by far the largest market for the whole group, although its share of the turnover has declined from 50.9 percent to 46.2 percent. Second is Sweden with 13.7 percent, up from 11.9 percent, ahead of other Nordic countries and North America.