Silva, the Swedish brand of lights and compasses, is preparing to explore more openings in sports retailing and in international markets after its acquisition by Karnell, a Swedish investment company. Unveiled earlier this month, the sale of Silva by Fiskars should have a positive impact of about €6 million on the cash flow of the Finnish group.
Lars Gullikson, Silva's chief executive, will remain in place along with other leading executives at the company, particularly Peter Hemmyr, who just joined at the start of June in the new position of sales and marketing director. He was previously at Hilti, the industrial equipment brand.
A new Silva board will be introduced in the autumn, comprising several leading industry representatives. Mats Hedblom, the former chief executive of Haglöfs, is likely to be among them. He is already a board member of Kasthall, another company in which Karnell has invested, specializing in carpets.
The Silva board and management will then come up with a new strategic plan based on the expansion of the Silva range: Driven by lighting products, this wider offer has already enabled Silva to move into more bicycle and sports stores, such as Décathlon.
Fiskars acquired Silva five years ago to partly integrate it with Gerber, its American brand of knives and other outdoor tools. The tie-up did create some distribution synergies in Europe, particularly enabling Gerber to move into European outdoor stores. The combination worked out well in Germany, for example, where the joint sales of Silva and Gerber have doubled since the tie-up.
However, only months after the acquisition of Silva, Fiskars launched a strategic overhaul: it then owned more than 50 brands and wanted to focus on a smaller number. Fiskars then froze earlier expansion plans in the outdoor business, depriving Silva and Gerber of investment that was required for their development plans. Another indication that Fiskars was moving away from the outdoor business came in 2009 when it sold Brunton, the former American arm of Silva, to the Fenix Outdoor group.
Silva and Gerber then started to drift apart, with Gerber's focus moving toward fishing and hunting. Since the start of this year, Gerber's sales in Europe have been supervised from its head office in Portland, Oregon, and the company should set up its own structure in Europe later this year.
Silva will take care of Gerber's distribution in all countries where it has subsidiaries until at least the end of this year. After that, it was agreed that Silva's subsidiaries will continue to distribute Gerber in the U.K. and Sweden (the latter also covering Finland), but it remains to be decided if that will also be the case for France and Germany. A split in these countries could impact the structure of Silva's French and German subsidiaries, which did benefit from synergies with Gerber.
On the other hand, the separation between Silva and Gerber provides openings for the Swedish brand to rebuild its business in Latin America. This was dismantled after the acquisition of Silva by Fiskars: Gerber was meant to sell Silva in the region, but this integration did not yield any significant sales for the Swedish brand. Another issue on the plate of the new owners is the situation in North America, where Silva's trademark rights are owned by Johnson Outdoors.