Odlo is returning to expansion this year after a strategic shift toward the sports market and direct partnerships with several large-scale sports and outdoor retailers.
Christophe Bézu, the former Adidas and Esprit manager who became Odlo's chief executive in 2015, said that the Swiss-based base layer specialist saw its turnover shrink by about 12 percent in Swiss francs for the fiscal year to the end of June 2016, although the decline amounted to 4 percent in constant currencies. The Frenchman is projecting sales to end the current fiscal year with a rise of more than 7 percent and to pick up more rapidly in the next years. His objective is to raise net sales to at least 200 million Swiss francs (€188.0m-$200.1m) by 2020, which is about twice the level of the latest fiscal year.
The uptick comes after a wide-ranging strategic overhaul at Odlo. The company wants to regain market share from brands such as Craft and X-Bionic in the category of base layers, but at the same time Odlo has decided to widen its distribution beyond the outdoor and winter sports categories, to compete more directly in the sports market. After a review of the supply chain, average prices have been reduced by about 15 percent and the brand has been working toward a less seasonal offering. Some of the distribution has also been cleaned up, particularly agreements with retailers working with consignment.
While Odlo's sales were previously focused on the German-speaking countries and France, Bézu has been spreading the brand in other international markets. Long-term partnership agreements have been reached at international level with Intersport and Sport 2000. The company has cut back small distribution agreements and instead arranged direct sales to a few key accounts in much larger markets. This applies in the U.S. with REI, where Odlo started an exclusive partnership in September 2015 with seven stores. Bézu said the distribution should be widened to cover 70 stores for the 2017 fall/winter season. Odlo is starting a trial along the same lines with Xebio in Japan and another such agreement was struck with Sportmaster in Russia, although neither of these is exclusive and Odlo continues to work with local distribution partners.
Phillip Weston, former executive at Adidas and Esprit, who became Odlo's country manager for the U.K. and Ireland last year, has been appointed as international key account manager. He was previously vice-president in charge of the U.K. and Ireland at Esprit, after assignments at Ben Sherman as managing director for global footwear and Skechers as general manager in Europe. James Clark has taken over as Odlo's country manager for the U.K. and Ireland.
Another change occurred in Spain, where Odlo is continuing to work with its distributor, Jorcani, but at the beginning of this year the company appointed Luis Pruñonosa as a consultant, in charge of Odlo's development in Spain and Portugal, with a new commercial and marketing structure. Pruñonosa has a long track record in the Iberian sports market, where he spent the last ten years building up sales for Le Coq Sportif.
Bézu said that orders for the spring/summer season were up by 17 percent and the trend was up more than 20 percent for sell-in for the fall/winter range. While the mix previously consisted of winter sales at about 85 percent, the share of summer products is already moving toward 25 percent. The product novelties include the launch of a training apparel range and the use of Ceramicool technology.