Craft’s CEO: ‘In five years we will double our turnover to €350 million’

SGI Europe met with Mr. Persson in Stockholm for an interview. The CEO was to give a talk to the Swedish sports industry’s trade association, Svenskt Sportforum. Earlier this year, Svenskt Sportforum praised Craft when the company was named Sweden’s brightest sports star.

The interview turned into a conversation about leadership and Mr. Persson’s leadership style; about surrounding yourself with employees who can think for themselves and who believe; about Barack Obama, daring to think BIG and how Craft will succeed in Asia.

Craft leadership: “We want employees who like to take more responsibility themselves.” 

SGI Europe: What makes a good leader?

Stefan Persson: A good leader doesn’t go around picking at details. I don’t have a great need for control, thinking that I wouldn’t have control of the big picture if I did. Instead, it would be best if you had employees who are good and who take responsibility. At Craft, responsibility is very much about having an entrepreneurial mindset. We should all be able to run projects ourselves. Other companies are probably more square and rigid. We are rounder, with us it is about working with freedom under responsibility. A good leader is also a leader who listens. When employees encounter a problem, I ask, ‘What are you thinking?’. Then, they often have a solution. ‘Yes, but do that,’ I usually say.

However, I suspect your leadership style is not just about asking employees to think for themselves. What do you consider your strong points as a leader?

I’m good at the big brushstrokes and spreading that thinking within the company. One thing we all need to have at Craft is a mindset that says, ‘Think big’. We should think, ‘What happens in five years?’ That’s what we did when we went from a turnover of 1 to 2 billion SEK (€175m). A leader must always be at the forefront and believe in these bigger company goals. As a leader, you also have to make others think for themselves. We want employees who like to take more responsibility themselves. At Craft, you should like that there is often neither a map nor a clear path. We need to be able to create everything ourselves from start to finish. Twenty-five years ago, we were a brand that sold underwear in blue and black. Today, we are something completely different.

As a leader, you also have to create a climate where mistakes are okay. Torsten (Jansson, CEO of New Wave Group, of which Craft is a part) used to say: ‘If we get eight out of ten right, that’s good. Something is wrong if we can’t allow ourselves to fail twice.’

Then I want to be someone who makes people feel happy in their workplace. I feel like there is a lot of happiness and positivity here. The fact that many of our employees have worked for us for a long time is, I think, an important proof of that. We in the management team have many years under our belts. I think we all enjoy our work and have fun together.

Stefan Persson, CEO: “Barack Obama is a great speaker and leader.” 

Which leaders have you been inspired by?

I like leaders who inspire and who are good at speaking. Barack Obama is a great speaker and leader. Then we all have Torsten in the backgraound at Craft. He has built the whole company from scratch, starting his first company, what would become New Wave Group, in a basement at his parent’s home to a company that today has a turnover of SEK 10 billion? From Torsten, I have been inspired to always believe in what we do.

Have you utilized their qualities in your leadership and if so, how?

I have tried to take inspiration from Obama in his way of speaking and I like to use his quotes. I borrowed the classic ‘Yes we can’ when we had to implement significant changes as a company. Like many other companies, we have also had to push people when we needed to change. I feel that it has been good to use well-thought-out rhetoric.

The future of Craft: from SEK 2 billion to 4. 

Why has Craft been so successful, especially in the last 10 years? 

Because we have dared to change the company and because we have dared to change ourselves. Take Nike, which has not always had football products. Originally, they made running shoes. Some people say to me: ‘You’ve had products for cross-country skiing for a long time?’ I respond: ‘No, we’ve had it for 24 years.’ The biggest thing for us at Craft has been to change and get people on board, to both dare to change themselves and continue in a changing company. We would not have been in the position we are today if we had not dared. Dared to be different. We are part of a company with a turnover of SEK 10 billion and an inventory value of SEK 5 billion. It is a unique business model. But it is suitable for us. I’m very impressed by Nike’s business model, but if we copy it, we lose every day. Instead, we choose to do things differently, such as having a presence in Finland with Finnish-speaking staff so that we can succeed in that market. We don’t beat everyone in the world in running clothes, but we can have a different inventory that benefits us and our partners.

Then a lot of success financially is about finding the right people. The right talents who believe in what we do and in the journey to be made. Many of our employees have moved from one role and developed within the company and taken on new roles along the way.

What are Craft’s financial goals for the future?

We have a turnover of SEK 2 billion (€175m) this year. The goal is to double that to 4 billion (€350m) by 2030. The Group’s goal is always to achieve 5-10 percent organic growth per year, and for several years, we have had an Ebit target of 15 percent. Those targets remain with a change to reach 20 percent in Ebit over time. What’s in the cards are the four business areas we stand on: D2C, Retail, Corporate and Club.

Craft goals: double the turnover to €350 million and how it’s done

How will you meet this hefty target, Stefan? Which markets will grow, and how will each business area develop?

By 2030, we will double our turnover by selling more than SEK 1 billion (€87.5m) at Club. The Corporate business area will increase by a further SEK 500 million (€43.75m) and Footwear by SEK 500 million (€43.75m). In addition to the sales development of D2C and our core categories cross-country, running, bike, and baselayer, we will reach €350 million.

This will primarily take place in markets where we are present today with the addition of new regions/countries for Footwear. The USA will be of great importance to our success, especially when it comes to Footwear and Club. This must be done with profitability in mind. We can’t go everywhere without making the money that the group expects from us.

You have a fairly new distributor in Asia and the sales development there has not been what you had hoped for yet. When will things turn around in Asia for Craft?

Asia is exciting, but the climate there obviously makes snow categories, where we are big, a challenge for us. Cycling is equally tricky as it is downright dangerous to cycle in many cities. Clothing for running has been slow, but now that we also have shoes, sales will pick up. In the eyes of many customers, we are a footwear brand so we go with the shoes first, so to speak. We have two stores of our own, one in Bangkok and one in Taipei, and we are working with our distributor to become established in the right-running stores. Eventually, we will succeed in Asia as well.

Stefan, here is a description of you as a leader from one of your closest colleagues. 

As a leader, Steffe always has a raw drive forward and a unique ability to inspire people around him and always see the possibilities in everything he and Craft do. While he is always driven forward, he is also always realistic and has an ability to clearly sort out what is important and what will be successful – and then focus on that and opt out of everything else, which is sometimes one of the most difficult things there is, to not do certain things and simply say no and stick to what we are good at.