Odlo is projecting a sales rise of about 20 percent to over 120 million Swiss francs (€104.0m-$128.0m) for the financial year ending in June, after it entirely revised its strategy last year to focus more on sports retailers and key accounts.
The Swiss-based company opted to target several large markets through exclusive partnerships with key accounts, which started as trials last year and have since been expanded markedly. Odlo's partnership with Xebio in Japan led to a trial in 15 stores last year, but this was expanded to the retailer's entire network this year.
Another trial at REI in the U.S. market allowed Odlo to get shelf space in 74 stores and for the next season the brand will be sold in 156 REI outlets. Sportmaster in Russia has taken up the brand in 25 of its most upmarket stores and online, which has allowed Odlo to more than double its Russian sales.
The partnerships are part of the strategy deployed by Christophe Bezu, the former Adidas manager who became chief executive at Odlo in July 2015. The strategy has enabled the brand to gain ground in Germany, France and Italy, with increased demand in the sports underwear, running and cross country skiing apparel categories. Odlo declined in the brand rankings published by Intersport Germany for last year, but the company said that its pre-orders with the buying group in Germany have moved up by more than 20 percent, and the same applies for Sport 2000 in Germany.
However, the brand has yet to tackle its relatively weak sales in Switzerland and China. Odlo has been sold in the country for several years but Bezu is envisaging a relaunch after a structural change in distribution. It appears that all options are under consideration as yet, from a licensing agreement to a distribution, a joint venture or online-focused distribution.
The brand has been enjoying significant exposure at the Winter Olympics through the sponsorships of national federations in several countries. The brand became a partner of the French cross-country skiing federation in 2016, covering all disciplines. Japanese athletes in biathlon are outfitted by Odlo, and the same applies for Slovenes in all sports related with cross country skiing, other than ski jumping. Odlo has also obtained a four-year partnership with the Norwegian biathlon association, but this will start in May.
Odlo reported sales of CHF 101 million (€87.6m-$107.7m) for the fiscal year until the end of June 2017, which was already an improvement of about 8.6 percent compared with the previous fiscal year. A lower gross margin was attributed to the product mix and the focus on key accounts, but Bezu says that the margin should swing back up with an increase in average prices for next winter.
The strategy calls for continued innovation in the performance underwear category. At the same time, the Swiss company is busy accelerating its supply chain and transforming its business structure to more efficiently serve the international key accounts.
Odlo's innovations for the next seasons are built around underwear with the Organic Bodymapping technology, the Zeroweight range of running products and re-designed assortments of training and cycling gear. The brand has sealed a long-term partnership with Zaha Hadid Design, which has already produced more fluid designs.