Björn Borg Q1 net sale rise 9 percent

REPORT_ The Björn Borg Group’s net sales increased by 9 percent to 142.8 million Swedish Krona

(21.7 million dollars), excluding currency effects, sales rose by 8 percent. The gross profit margin was 52.8 percent, earnings per share before and after dilution amounted to 0.62 Swedish Krona (0.09 dollars). Brand sales (excluding VAT) decreased by 12 percent, excluding currency effects, the decrease was 14 percent.

During the quarter it was announced that Henrik Bunge has been appointed the new CEO of Björn Borg. Henrik Bunge will assume the position on August 1, 2014. “This year’s first quarter was mixed. We saw increases in revenue, gross profit margin and operating margin, mainly because of shipment delays from the previous quarter until the first quarter of 2014. Better profitability in the Swedish wholesaling operations and a strong performance by our operations in England and Finland contributed positively at the same time that sales of our spring and summer collections decreased compared with the previous year,” said Henrik Fischer, Acting CEO of the company.

Brand sales in the underwear product area fell by 13 percent for the first quarter. Underwear accounted for 53 percent of brand sales. Sportswear also saw a decline in brand sales. Sales also decreased in the footwear, eyewear and fragrances product areas, while sales of luggage & bags were relatively unchanged. In total, sales of licensed products fell by 10 percent during the first quarter.

Among large markets, Belgium and Finland saw good growth. The Netherlands, Sweden and Norway reported declines, while Denmark was relatively unchanged. Among Björn Borg’s smaller markets, England posted good growth numbers. No new Björn Borg stores were opened during the first quarter. As of March 31, 2014 there were a total of 38 Björn Borg stores, of which 17 are group-owned.

Higher revenue mainly in the underwear and sportswear product companies, combined with an improved gross profit margin, contributed to an increase in operating profit during the quarter. The operating margin was 13.3 percent. Operating expenses were slightly higher year-on-year. The discontinued operations in China reduced costs at the same time that new stores opened in Sweden, Finland and England, as well as certain modifications in the Finnish operations, added expenses.

The Björn Borg Group owns and operates a total of 17 stores and factory outlets in Sweden, Finland and England that sell underwear, adjacent products, sportswear and other licensed products. Björn Borg also sells online through Bjornborg.com. As of January 1, 2014 revenue and expenses attributable to the Group-owned stores in Finland and England are also reported in this segment. These items previously were not reported separately from the wholesaling operations above due to the insignificant amounts. Operating revenue in the Retail segment increased by 15 percent during the first quarter. External net sales rose by 15 percent.