Haglöfs continues to enjoy spectacular expansion in several international markets, partly supported by the recent weakness of the Swedish krona.
It has reported a sales rise of 26.5 percent for the first quarter of this year, up 12 percent in constant currencies, and company officials indicate that the trend did not weaken in the next three months.
As reported earlier this year, Haglöfs saw its sales climb by 15.7 percent to 495 million Swedish kronor (€44.9m-$63.8m) in 2008, driven by a 19.6 percent increase for apparel. Footwear grew by 7.5 percent and equipment by 1.8 percent. Furthermore, Haglöfs’ operating profit jumped to SEK53.4 million (€4.84m-$6.89m), which prompted the company to raise its long-term target for operating profit from 10 to 12 percent.
This objective was met in the first quarter of this year with an operating margin of 12.5 percent before interest, tax and amortization. While expanding sales, the company cut some costs and upgraded its pricing.
Haglöfs reinforced its leading position in Sweden last year, lifting its sales in the country by 10 percent to SEK128.2 million (€11.6m-$16.5m). Ongoing growth in Sweden is being stimulated by dedicated retail space for the brand in many stores.
Several other Swedish outdoor brands at the OutDoor show reported that the recent weakness of the Swedish krona against the Danish and Norwegian currencies has been beneficial for the Swedish outdoor market at large, as it has boosted sales to tourists from these countries. This transpired in the results of Naturkompaniet, the leading outdoor retailer in Sweden, which saw its sales increase by 22 percent in the first quarter of this year.
Nearly all foreign countries generated double-digit sales growth for Haglöfs last year, with the exception of Norway and the Benelux countries. Investments paid off in Germany, where Haglöfs’ sales were up by 25 percent to SEK50.4 million (€4.6m-$6.5m), while Austrian sales climbed by 22 percent. In the first quarter of this year, combined sales in Austria and Germany grew at an even faster rate of 78 percent, and there were no signs of significant deceleration in the second quarter.
This expansion was achieved without any large increase in the number of German stores serviced by Haglöfs – but through strong sell-through of wider product ranges in the same stores. The brand’s footwear is selling robustly in Germany.
The brand’s Germany subsidiary has added two agents in the south of the country and has started selling to a few accounts in the Czech Republic, Slovakia and Slovenia. To deal with the expansion, Haglöfs has created two new jobs, for a sales manager in Austria and a key account manager in Germany. It has also beefed up its Scandinavian team with one more sales person in Sweden and another one in Norway.
Further growth is taking place in the U.K., where Haglöfs opened its own sales office last March, in Staveley Mills. The business is led by Neil Bradley, who joined last September. It sells to about 75 stores in the country and has started working with some large chains such as Cotswold and Ellis Brigham.
The Swedish company is still small in Japan, but it grew there by 71 percent, reaching SEK18.1 million (€1.6m-$2.3m) last year. The Japanese distributor has seven own stores, some of them called Haglöfs and others selling the brand prominently.
As reported in this publication last week, the management of international marketing and sales at Haglöfs was taken over in June by Nicolas Warchalowski, a former executive at Procter & Gamble and Red Bull, as Claes Broqvist prepares to switch to Odlo.