Skandinavisk Høyfjellsutstyr, a Norwegian chain of outdoor shops, is the only operation of the Swedish group that was still in red during the 1st quarter of 2006, due especially to high rents. Instead Naturkompaniet, the Swedish retail chain of Fenix Outdoor, continued to improve its profitability, thanks in part to a long and cold winter season that led to fewer off-price sales and higher margins. Traffic in the stores was up.
Overall, Fenix’ retail division boasted a 33 percent sales increase on a same-store basis during the quarter, as compared to a year ago. Its net sales rose by 30 percent to 42.1 million Swedish kronor (€4.5m-$5.8m), but because of the lingering losses in Norway, which represented 18 percent of its revenues, the division still suffered an operating loss of 0.9 million SEK (€0.097m-$0.124m) during the period, down markedly from the year-ago loss of 4.8 million SEK. That should change following a decision to close down two unprofitable stores in the Oslo area.
The wholesale division, consisting of brands such as Fjällräven, Hanwag and Primus, improved its operating profit to 28.8 million SEK (€3.1m-$4.0m) from 26.7 million SEK, in spite of a negative provision of 1.1 million SEK for the re-evaluation of certain financial instruments.
The net wholesale turnover increased by 18 percent to 152.1 million SEK (€16.4m-$20.9m) in the quarter, or up 17 percent on a comparable basis. Earlier deliveries of Spring merchandise boosted the sales results and the German market, which represented 34 percent of revenues, developed better than expected. A full 90 percent of the wholesale revenues were generated outside Sweden, but this compared with 91 percent in the year-ago period.
Adding up the wholesale and retail businesses, Fenix Outdoor recorded a 20 percent increase in net revenues to 194.2 million SEK (€20.9m-$26.7m). Operating income (EBIT) rose by 27 percent to 27.9 million SEK (€3.0m-$3.8m), while net profit jumped by 28 percent to 18.7 million SEK (€2.0m-$2.6m).
Further acquisitions are possible now that the takeover of Hanwag has been largely and successfully digested. In fact the board of directors has been given permission by the group’s shareholders to raise its nominal equity by up to 5.2 million SEK (€0.56m-$0.71m) to help finance acquisitions, with no rights of first refusal for existing shareholders.
Three directors – Richard Fuglesang, Sören Gyll and Jan Wister – did not want to be re-elected. New on the board is Ulf Gustafsson, the former managing director of the company who left last year to develop his own sports retailing business. His successor, Johan Vikman, is still in charge.
