Björn Borg acquires Benelux distributor, targets 14% revenue rise
Swedish underwear label Björn Borg has announced the acquisition of the Baseline group, its Benelux distributor, whose licence was renewed at the end of 2015 until the end of 2019. The acquisition is a major strategic move for Björn Borg, since the Netherlands are just as important to the label as its domestic market in Sweden.
The transaction will be effective as of 2nd January 2017. Björn Borg stated it will pay €1.25 million for Baseline's capital over the next three years, and will also cover the loans taken out by the distributor, to the tune of €2.8 million.
Björn Borg's Benelux business in 2015 was worth roughly €23.3 million, but its EBIT was in the negative (-€0.7 million). "I would like to thank Rene de Bruin and Luc Versmissen for their huge effort in establishing and expanding the Björn Borg brand in Benelux," said Björn Borg’s General Manager Henrik Bunge, "as they grew revenue from €5 million in 2004 to the current level."
In the first nine months of the 2016 fiscal year, Benelux accounted for over one-third of Björn Borg's revenue, thanks to the label’s presence in multi-brand sportswear stores and also in twelve mono-brand stores in the Netherlands and Belgium. Benelux is also the region in which Björn Borg has better developed its sports apparel range.
For Björn Borg, the Benelux distributor’s acquisition will mean eliminating an intermediary, which it estimates will increase 2017 revenue by approximately €10 million.
Over the first nine months of the current fiscal year, Björn Borg's revenue was SEK460 million (approximately €47.32 million), a 9% rise compared to the same period last year. Specifically, Denmark's sales has grown but those of both Benelux and Norway have fallen. In the last quarter, the label's sales have slumped by 6%, and its operating income lost 19%, dropping to SEK28.6 million (€2.9 million).
Björn Borg is keen to develop in the sportswear and footwear categories, while underwear continues to account for 60% of its sales. The label is present in some twenty markets, with 39 stores, 20 of them directly owned. Its objective is to increase the €59 million revenue recorded in 2015 by 14%.
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