Odlo, the Swiss specialty brand for outerwear, cross-country and running wear as well as functional underwear, has sealed an agreement with Zenoah of Tokyo, which is to set up Odlo’s distribution in Japan. With its 15 employees, Zenoah is a subsidiary of Zett Corporation, and distributes local specialty brands for running apparel and accessories such as Remo, 4DM and Kaats. Zenoah will open an Odlo store in Tokyo soon, and a second store will be opened in Sapporo before the end of this year.
Japan is the third Asian market to be targeted by the Swiss after it set up distribution in Taiwan and Hong Kong. Parallel to the move into Japan, the company has re-organized its distribution in Sweden: The new importer is the recently founded AB International Sports Company – I.S.C. which is headed by Jan Lundin, known as the founder of the SOS brand.
In its fiscal year 2008, Odlo managed to increase its sales by 5.2 percent to 144.5 million Swiss francs (€95.2 m -$132m). Andreas Kessler, the company’s chief executive, says that Odlo’s business is still dominated by functional underwear, which contributes about 50 percent to the total sales, followed by the categories "tec shirts" (technical shirts) and running. Outerwear – meaning products other than base layers – is on top of Odlo’s agenda, but its share is still below 10 percent. Sales of underwear were up by 22 percent, tec shirts by 11 percent.
Odlo’s were affected the sale last year of the Bjørn Dæhlie brand, which generated more turnover in the cross-country ski sector than the Odlo core brand. Kessler points out, however, that the Odlo brand is growing at a double-digit rate, partially due to the collection that it has developed in co-operation with Ole Einar Bjørndalen, the cross-country superstar from Norway. Without the special effect of discontinuing Bjørn Dæhlie, overall sales would have been up by 15 percent.
In terms of geography, Germany continues to be by far Odlo’s strongest market with a share of about 40 percent of the total sales followed by Switzerland and France. In all three core markets sales were up at a double-digit rate. Pre-order sales for the winter 2009-10 season are up by 15 percent, partially due to a triple-digit growth in the sports bra segment. According to Kessler, the good development is also due to the fact that Odlo is more flexible as far as the supply chain is concerned. Instead of sourcing from the Far East, the Swiss can rely on own factories in Portugal and Romania.
Odlo continues to strengthen the awareness of the brand on the high street through own retail operations. In 2008, it opened three more stores in Germany, in Hamburg, Düsseldorf and Berlin. In the same period, the first Austrian store was opened in Klagenfurt. A special case is France where the “Magasins Odlo” are no corporate doors, but franchises. Currently, there are 12 stores in France, with five more expected to follow before the end of this year. The share of retail sales of the total sales is well below 10 percent, Kessler says.