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Björn Borg net sales witness 17 percent rise in Q3

By Prachi Singh

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The Björn Borg Group’s net sales amounted to 191.4 million Swedish krona (22.1 million dollars) in the third quarter, representing an increase of 17 percent. Excluding currency effects, sales rose by 8 percent.

“In total Björn Borg’s sales increased in the third quarter by 17 percent compared with the same quarter in 2014. From a historical standpoint I would note that this made the third quarter the company’s best ever in terms of sales,” said Henrik Bunge, the company’s CEO.

Nine months and third quarter highlights

The fall/winter collection from the sports apparel product company contributed positively to the sales increase in the third quarter. The corresponding underwear collection decreased compared with the previous year. The Swedish underwear wholesaling operations had a very strong quarter, partly due to expanded distribution to sporting goods retailers. The wholesale footwear company also had a very strong quarter, partly because distribution in Denmark was taken over. The Finnish company reported unchanged sales, while the British company saw good growth during the quarter. Group-owned retail operations and e-commerce both had another good quarter with higher sales.

The Group’s net sales amounted to 421.7 million Swedish krona (48.7 million dollars) in the first nine months, an increase of 5 percent. Excluding currency effects, sales decreased by 3 percent. Adjusted for the delayed shipments and currency effects, sales rose by about 3 percent. External sales by the product companies dipped slightly, although the collections as a whole did well.

Sweden posted a positive trend during the first nine months with increases in underwear wholesaling, e-commerce and Group-owned retail operations. Footwear wholesaling also witnessed growth, partly due to the new distribution to the Danish market. The British and Finnish operations retreated during the period.

The gross profit margin for the third quarter decreased to 51.9 percent. Excluding currency effects, the margin would have been in line with 2014. Despite higher sales, operating profit increased only slightly to 32.9 million Swedish krona (3.8 million dollars) due to the slightly lower gross profit margin and higher operating expenses during the quarter.

The gross profit margin for the first nine months of the year was in line with the same period in 2014 at 52.7 percent (52.6). Excluding currency effects, the margin would have still been over 53 percent. Despite improved sales and a slightly higher gross profit margin, operating profit fell to 44 million Swedish krona (5 million dollars) in the first nine months due to increased operating expenses.

Development by business segments

The Group consists of a total of 13 companies, nine of which operate under the Björn Borg brand on every level from product development to wholesaling and consumer sales in its own Björn Borg stores. The business segment’s operating revenue amounted to 64.6 million Swedish krona (7.4 million dollars) during the first nine months of 2015. External operating revenue decreased slightly to 27.5 million Swedish krona (3.1 million dollars).

The Björn Borg Group has global responsibility for development, design and production of underwear and adjacent products as well as sports apparel through Björn Borg Sport. This business segment’s operating revenue increased 17 percent but external operating revenue decreased 1 percent compared with the same period in 2014.

The Björn Borg Group is the exclusive wholesaler of underwear, sports apparel and adjacent products in Sweden, Finland and England as well as footwear in Sweden, Finland, Denmark and the Baltic countries. The business segment’s operating revenue increased by 7 percent in the first nine months of 2015. The British and Finnish operations saw lower sales year-on-year. The Swedish wholesaling operations for underwear and footwear instead reported higher sales in the first nine months.

The Group owns and operates a total of 18 stores and factory outlets in Sweden, Finland and England that sell underwear, sports apparel, adjacent products and other licensed products. Björn Borg also sells online through www.bjornborg.com. Operating revenue in the retail segment increased by 28 percent in the first nine months and external net sales rose by 33.3 percent during the period. Sales for outlets and comparable Björn Borg stores in Sweden rose by 14 percent year-on-year.

Bjorn Borg