Juha Luhtanen has been appointed to the helm of the L-Fashion Group's sports division, comprising the Icepeak and Luhta brands, among others. A former sales director of the sports division, he takes over from his elder brother Vesa Luhtanen, who previously combined the leadership of this division with the general management of the entire group. The split of these two functions will enable Vesa to spend more time on the group's projects in franchise retailing and in Asia.
Vesa's eldest son, Jeri Luhtanen, who just graduated in international business and finance, has been placed in charge of L-Fashion's business with Li-Ning, the leading Chinese brand for which it holds distribution rights in most European countries.
The retail development for the sports division will focus on franchise partner stores, which are meant to complement a much larger wholesale business. A franchise store for L-Fashion's sports brands was opened in Vasa last year and another six are to be added in Finland before the end of the year. Then, the company is gearing up for the opening of twelve franchise partner stores all around Germany in August and September.
The next target countries are those where L-Fashion has its own subsidiaries, from France to Italy, the Netherlands and Austria. The aim is to add at least one of these countries to the program in the next two years, provided L-Fashion has at least ten partner stores to get started. However, the Finnish group's management emphasizes that wholesaling will remain the main pillar of its brands' distribution in the sports and outdoor market.
The stores will rely on a dedicated warehouse in Lahti with stock intended for permanent replenishment of the stores. The franchise partners are meant to firmly buy the products, based on suggestions made by the supplier twice a week. This facility is already used by the 22 fashion and mono-brand stores run by the L-Fashion group in Finland. An online retailing operation to be set up by the group will direct customers in Finland and Germany to the franchise stores. While the platform will centralize orders, customers will have to pay and pick up their orders at the stores.
The Finnish group is contemplating opening about 50 to 70 such franchise stores in Germany over the next three years, some of which may be former Jack Wolfskin partners. The concept calls for franchise stores to reach a size of 80 to 160 square meters for multi-brand stores. The two main brands should be Luhta and Icepeak but franchise partners may add Rukka and Li-Ning.
Separately, the company has cut its number of stores from twelve to eight in Russia, taking out unprofitable stores in the face of unfavorable exchange rates and market pressure. The company is well-placed to watch trends in Russian consumer spending, because Finnish statistics tell them exactly how much Russian tourists spend on tax-free goods at the border – a reliable indication of consumer sentiment.
When it comes to Asia, the group is already active in China and South Korea. It has started talks with potential partners to move into the Japanese market as well, with the Icepeak and Luhta brands. Asian sales make up less than 2 percent of the turnover in the group's sports division, so the potential for expansion motivated Vesa Luhtanen to take that assignment into his own hands.
Among its Asian projects, the company wants to open more of its own stores in China. It has 18 partner stores and two of its own in Suzhou, where its Chinese office is based. The stores enabled L-Fashion to study Chinese demand and encouraged it to come up with an adjusted Asian range for Icepeak from the second half of this year.