The Mammut Sports Group saw its sales decline by 0.8 percent to 233.4 million Swiss francs (€218.3m-$232.1m) in 2016, which was a decline of 2.9 percent in constant currencies, but an improvement compared with the slump of 5.8 percent it had suffered in 2015.
The division's operating profit was up by CHF 1.1 million to CHF 1.2 million (€1.12m-$1.19m), including set-up costs of about CHF 4.5 million (€4.20m-$4.48m) for strategic initiatives to improve the Swiss outdoor brand's business in the next five years.
As reported by the Conzzeta Group, which controls Mammut, sales were down by 7.4 percent in Switzerland, Germany and Austria, but this was compensated for, to a large extent, by an increase of 6.4 percent in Asia and other markets. The Mammut group's turnover in the German-speaking countries amounted to 48.6 percent of its sales last year, down from 64.1 percent in 2011. Sales tumbled in apparel and footwear, but they moved up in climbing equipment and backpacks.
The Swiss group benefited from price increases and cost reduction measures initiated last year, after it suffered from currency exchange rate swings. The pressure on margins remained strong in Europe, Conzzeta added, and it was intensified by sluggish business in the winter, which was affected by unfavorable weather conditions. Orders for the upcoming summer season were up slightly at the end of the year.
The Mammut brand had 77 mono-brand stores in eleven countries at the end of last year. Conzzeta said some improvements were required in the retail network in terms of profitability and consistency, which led to an overhaul of the store concept. Conzzeta described this as a springboard for the brand's expansion, particularly in Asia. Mammut launched its online store last year. Earlier this year, it opened a sales office in Hong Kong, as previously reported.
Embarking on a new five-year strategic plan, Mammut changed its leadership last year with the appointment of Oliver Pabst as chief executive. The plan calls for tighter partnerships with major wholesale customers to increase consumer traffic, through a more active management of floor space. Digitization and increased international investments are two other legs of the group's latest strategic plan, which will have an adverse impact on the division's operating result and operational free cash flow for the time being.
Overall, the Conzzeta Group generated a sales rise of 6.4 percent to CHF 1,214.3 million (€1,135.5m-$1,207.6m). An increase of 15.5 percent in the second half more than made up for weakness in the first half. Excluding acquisitions and currency exchange rate changes, sales were up by 2.6 percent. The Swiss group's operating profit was also disproportionately high in the second half, and Conzzeta ended the year with an operating profit margin of 6.9 percent. It expects to achieve organic sales growth in 2017 and a higher operating result with a slightly improved Ebit margin.