Outnet, a Swedish online retailer specializing in outdoor products, has acquired all the shares in Get Out, another strongly recognized online retailer based in Sweden that focuses on outdoor equipment.

Their joint annual turnover should reach more than 70 million Swedish kronor (€7.6m-$10.2m) this year, with nearly SEK 50 million (€5.5m-$7.3m) coming from online stores and the remainder from five brick-and-mortar stores. The investment could be regarded as part of Outnet's strategy to become the largest online outdoor retailer in the Nordic countries.

Owned and led by Stefan Gustafsson, Outnet achieved sales of about SEK 50 million for the fiscal year ended in June 2011. This includes the turnover of two small stores trading as Naturbolaget: The Gustafssons started off in the outdoor business by acquiring a decades-old store in Kalmar, in the southeast of Sweden, and then added another in nearby Växjö. The sales of the online business, which was launched six years ago, reached SEK 35 million (€3.8m-$5.1m) for the last fiscal year.

Ahead of its largest rivals in Sweden, Addnature and Playground, Outnet has strongly invested in its infrastructure to build up a Nordic online business. Backed up by Verdane Capital, a venture capital firm, Outnet moved into Denmark in October 2010, then into Norway last April, and into Finland last month. It has established companies in each of these countries, with employees speaking the relevant languages.

About 65 percent of those who shop on Outnet are based in Sweden, 25 percent in Norway and 5 percent in Denmark. The remainder consists of occasional deliveries to other European and Asian countries. To accompany its international expansion, Outnet's warehouse in Kalmar, in the southeast of Sweden, was enlarged to 3,200 square meters earlier this year.

Get Out has an even mix of online retailing and sales offline. Established in 2000 by Jocke Sundberg, the company operates three stores:

- Säck in Stockholm, which sells only backpacks and sleeping bags;

- another small store in Malmö, opened in 2011;

- and an outlet of 1,200 square metres in Bodafors, in southern Sweden.

Get Out is expected to reach sales of about SEK 20 million (€2.2m-$2.9m) in 2011, with some SEK 14 million (€1.5m-$2.0m) coming from the online store. It gets 6,000 to 7,000 customers per year, 68 percent of them men.

Due to its focus on equipment, which makes up about 80 percent of its sales, Get Out achieves a higher average shopping basket than most other specialist online retailers.

Get Out has acquired such a name in the outdoor business in Sweden that the events it holds in Bodafors regularly draw a crowd of about 3,500 people and 20 suppliers, who use the twice-yearly gatherings as an opportunity to meet end consumers and special guests. However, Get Out's profitability has been weak and sometimes nonexistent in the last years.

The two online retailers are partly complementary. As Sundberg puts it, Outnet's customers are more likely to be male and female customers in their 30s with small children, while Get Out's customers are mostly men in their 40s, die-hard outdoor people who are eager to spend on the latest equipment.

Gustafsson said that Outnet would continue to trade from both the Outnet and Get Out platforms, and that all five stores would remain open for the time being. He estimates the market for online retailing of outdoor products at about 10 percent of the entire Swedish outdoor market, which Outnet places at about SEK 4 billion (€440m-$595m) at the retail level.

Gustafsson is confident that this online market will continue to grow, but he believes there will be space for only a few profitable specialists in the Nordics – and he wants to be in the lead.

Addnature remains the largest independent online retailer specializing in outdoor products in Sweden, with sales of about SEK 102 million (€11.0m-$14.7m) for the fiscal year ended in April 2011. This includes a turnover of SEK 55 million (€5.9m-$7.9m) for the online store. The remainder comes from two stores in Stockholm.

Over the last few years Addnature's turnover has been increasing at annual rates of between 30 and 70 percent, with particularly rapid development on the internet side. About 40 percent of the turnover consists of apparel, driven by Houdini, which generates more sales than any other brand on Addnature.

Addnature has about 50,000 to 60,000 customers per year but, unlike Outnet, about 98 percent of them are based in Sweden. The online store ships to all EU countries, but the website is only in Swedish. To make its service more accessible to people outside Scandinavia, Addnature has started working on an English-language website.

Online retailing of outdoor products in the Nordic countries will be thoroughly analyzed in a upcoming market research report that we plan to issue next year.