Björn Borg gross profit rise 50.9 percent in 2013

REPORT_ In its annual report, Björn Borg has said that its net sales in 2013 amounted to 256.4 million Swedish krona (39.2 million dollars) with operating profit of 15.5 million Swedish krona (2.3 million dollars). Net sales in retail amounted to 80.5 million Swedish krona (12.3 million dollars) in 2013.

The gross profit margin for the full-year increased to 50.9 percent. Excluding currency effects, the margin would have been 50.4 percent. Operating profit decreased during the year by 70 percent with an operating margin of 4.2 percent. Lower revenue in the underwear product company as well as Björn Borg Sport and Swedish wholesaling, mainly during the fourth quarter, is the biggest reason for the profit decline.

In 2013 net sales amounted to 77.5 million Swedish krona (11.8 million dollars) with operating profit of 14.7 million Swedish krona (2.2 million dollars). In 2013 net sales amounted to 294.1 million Swedish krona (45 million dollars) with operating profit of 4 million Swedish krona (0.6 million dollars).

Commenting on the development, Henrik Fischer, Acting CEO of Björn Borg said, “Weak demand and widespread market uncertainty among our partners affected Björn Borg’s operations in 2013, with lower sales and earnings compared with the previous year. The main reason was our biggest market, the Netherlands, where our local distributor significantly reduced its network of retailers in a generally weak market. We have seen a sense of cautiousness among our retailers in Sweden and other markets as well, with some chains placing more focus on private labels. At the same time we are seeing a slight increase in follow-on orders, which shows that sales at the retail level have probably done a little better than retailers had hoped. We also saw a positive sales trend in our own operations in England and Finland.”

The Board of Directors has established financial objectives for the period 2012–2014 with average annual organic growth of at least 10 percent, an average annual operating margin of at least 20 percent, an annual dividend of at least 50 percent of net profit and long-term cash reserves equivalent to 10–20 percent of annual sales.