Fenix Outdoor AB of Sweden reported its brand sales increased nearly 15 percent in the United States last year thanks to a boost from the launch of its Fjällräven apparel brand here.
The company reported U.S. brand sales increased 14.9 percent to SEK162 million ($25mm) during the year. Fenix Outdoor has distributed Primus cooking stoves and Brunton compasses, lighting and other gear in the United States for years. It launched Fjällräven and its Hanwag footwear brands here in 2013 as part of a global strategy to boost higher margin softgoods sales.
For the full year ended Dec. 31, 2013, Fenix Outdoor’s Group sales grew 8 percent to SEK 1,836.9 million ($282mm) as growing Brand sales offset a decline in retail sales. Brand sales increased 11.0 percent to SEK1.26 billion ($194mm) thanks largely to the ongoing global expansion of Fjällräven, which also continued to do well in its more mature markets. The Hanwag, Primus and Tierra brands exhibited “solid performance with no major surprises.” Brunton, which is in the midst of shifting more emphasis to portable power and navigation products, saw sales decline from 2012.
Operating profit at the Brand segment increased 8.7 percent to SEK259.8 ($40mm), or 20.6 percent of revenues, down 40 basis points from 2012.
Fenix Outdoor said consolidated Retail sales grew 2.0 percent to SEK574.5 million ($88mm) in 2013, as mild weather reduced fourth quarter traffic in its core markets of Sweden and Finland. Sales remained stronger than expected in Finland, where 14 of the company’s franchised Partioaitta shops sell adventure travel and gear. Sales were weak in Sweden where more than 30 of its Naturkompaniet travel and gear shops operate. Operating profits at the Retail segment fell 18.7 percent to SEK36.6, or 6.4 percent of revenues, down 160 basis points from a year earlier.
Fenix Outdoor opened flagship brand stores in New York and Amsterdam in 2013 as well as two smaller brand stores in the United States. In January it announced plans to take a 20 percent stake in Germany's largest adventure travel and gear retailer, Globetrotter Ausrüstung GmbH, to create a retailing alliance across Northern Europe. That transaction is expected to close later this month.
Fenix Group said the impact from the exchange rate for the euro, the Group's main selling currency, was negligible. Consolidated operating income for all operations increased 12.4 percent to SEK259.4 million ($40mm), or 14.1 percent of revenues, up 50 basis points from 2012.
Fenix Outdoor ended 2013 with inventories valued at SEK556.6 million, up 21.6 percent from Dec. 31, 2012. Cash and cash equivalents declined 7.0 percent to SEK133.5 ($21mm). The company attributed the changes to higher spending on inventory to ensure earlier delivery of expanded spring offerings in both the United States and Europe. The Group's interest -bearing debt at year-end was 45.7 million, up 4.1 percent.
