Björn Borg acquires its Benelux distributor Baseline

Björn Borg has announced the acquisition of Baseline Group, the current distributor of Björn Borg products in the Netherlands and Belgium (Benelux). The company said, distribution agreement for Benelux was terminated in December 2015, which was to expire in December 2019, when distribution would be taken over by the Björn Borg Group.

“I am happy to announce this step for the vertical integration of our business and for getting a stronger hold of the sportswear business. Through the acquisition of the Benelux operations, we increase the potential that we see in this important market and are able to secure the continuity of business by building on the platform that is already in place. We see this as an important investment for future growth,”said Henrik Bunge, CEO of Björn Borg in a statement.

Björn Borg takes charge in Benelux with Baseline acquisition

The company said, Benelux region is the largest market for Björn Borg, ahead of Sweden, accounting for 26 percent of total brand sales in 2015. It is also the market where the brand has by far the firmest foothold in sports apparel products, which is a key strategic product category for building Björn Borg as a sports fashion brand.

The agreement includes wholesaling of mainly underwear and sports apparel as well as retail operations of twelve Björn Borg concept and outlet stores in the Netherlands and Belgium. The business also involves logistics for the local market. Baseline Group has a total of 90 employees and a turnover in 2015 for the Björn Borg brand of approximately 23.3 million euros (25 million dollars) with an EBIT of about -0.7 million euros (-0.75 million dollars).

“I also wish to thank Rene De Bruin and Luc Versmissen for their great contribution in building and strengthening the Björn Borg business in Benelux over the years, taking it from 5 million euros (5.3 million dollars) in 2004 to where it is today”, added Bunge.

Björn Borg expects Baseline addition to boost annual sales

Björn Borg will pay 1.25 million euros (1.34 million dollars) for all shares and shareholders’ loans in the Baseline Group over a three-year period. As part of the transaction, Björn Borg will also take over working capital financing from local banks of up to 2.8 million euros (3 million dollars).

The company said, consolidating Baseline Group into the Björn Borg Group is estimated to increase annual net sales by approximately 100 million euros (107 million dollars) without impact on the EBIT, excluding short-term negative effects for 2017. In 2017 the Björn Borg Group EBIT is estimated to be reduced due to timing effects when revenues related to the Benelux market will be transferred from 2017 to 2018, as a consequence of accounting effects when the wholesale and consumer sales are operated within the Björn Borg Group instead of by an external distributor.

Picture:Facebook/Björn Borg