Basicnet has signed an exclusive five-year license agreement with Sportmaster for the distribution of Kappa and Robe di Kappa products in Russia. The Moscow-based company is the largest sporting goods retailer in Russia, and it also has a strong presence in Ukraine, Belarus and Kazakhstan. It operates a total of more than 350 stores under the Sportmaster and Sportlandia banners.

Sportmaster will sell the two brands in its own retail network and to independent retailers through its wholesale operations. The license is expected to generate revenues of about $60 million over the five-year period.

Separately, Basicnet announced a 15.1 percent increase in aggregate sales in the first quarter of the year to €104.8 million, driven by strong growth in the Americas and Asia-Pacific. Aggregate sales include its direct sales in Italy and those of its licensees around the world.

Aggregate revenues in European Union countries increased by 8.6 percent to €75.2 million in the quarter, dropped by 1.2 percent to €4.8 million in other European countries, jumped by 59.6 percent to €3.4 million in the Americas, surged by 68.2 percent to €15.1 million in Asia-Pacific and increased by 7.1 percent to €6.2 million in the Middle East and Africa.

Consolidated direct sales achieved by the group dropped by 5.3 percent to €36.3 million. Sales by its mono-brand network jumped by 18.0 percent thanks to new openings and a 2.0 percent rise in same-store sales. However, the group was cautious regarding sales to multi-brand retailers due to insolvency risks.

Royalties and sourcing fees were up by 17.9 percent to €8.7 million.

The gross margin decreased to 36.3 percent from 43.3 percent a year earlier and the operating margin plummeted to 10.4 percent from 20.2 percent. The loss of profitability results from higher raw material costs that were not passed on to clients to support sales volumes, as well as an increase in sponsoring, labor, selling, general and administrative expenses. The net profit was slashed to €2.0 million from €5.0 million.

In the four months to April, the group opened 19 stores in Italy, lifting the total number to 202.