Haglöfs will widen its distribution beyond Europe after its takeover by Asics, which was detailed in our previous issue. In the last years, the Swedish outdoor company has expanded from Scandinavia to a flurry of other European markets, but the company’s managers told us at the OutDoor fair yesterday that Haglöfs’ acquisition by Asics would enable it to rapidly move into further international markets – starting with the U.S. and several Asian countries.
European expansion has been driving compound sales growth of more than 15 percent for Haglöfs in the last four years. A business plan drawn up by the company before its acquisition by Asics calls for a comparable level of growth to continue until at least 2012. Company managers indicate that they are ahead of target so far this year, with impressive expansion in relatively new markets like Germany, but also a sales hike of more than 10 percent in the Nordic countries.
A new jointly developed business plan is being finalized. It is expected to show potential for further strong growth in sales as well as profits, thanks to Asics’ support, justifying the high premiums that the Japanese has agreed to pay. Officials of Asics in Tokyo said the takeover price was reasonable and based on due diligence.
Executives of Asics and Haglöfs insisted at the show that the two brands would continue to be managed and marketed separately, and that Haglöfs’ high-end positioning would remain intact. The two companies share an interest in consistent brand-building and long-term strategic investments.
Haglöfs has not moved into any new markets for several years, except for a timid launch in the Czech Republic through its German office, and company executives indicated that they could have spread faster with more financial and other resources. As reported last month, the Swedish company had already laid the foundations for further international growth before the deal with Asics by boosting its management. Furthermore, it started studying the U.S. market and is preparing a phased launch in the country.
When it comes to Asia, Haglöfs has been distributed for many years in Japan, where it has attained a strong position, but the takeover by Asics should enable Haglöfs to get started in several other Asian countries. Russia was another country mentioned as an opportunity that could be opened to Haglöfs through Asics. The running company has plans to open its own stores in the country, and Haglöfs would neatly complement the running brand’s ranges to have a seasonal offering all year round.
In terms of product development, Haglöfs will be able to benefit from Asics’ support in the footwear sector, while Asics will benefit from Haglöfs support in the area of apparel, although both companies have made investments in these segments lately.
Haglöfs has just started to get the product right. Its footwear sales jumped by more than 47 percent last year, but they still made up just 7 percent of its turnover of nearly 590 million Swedish crowns. Similarly, Asics apparel only accounts for sales of about €50 million in Europe, amounting to roughly 8 percent of its turnover in the region, but it is targeting European apparel sales of €200 million by 2015.