Rapala VMC, the Finnish-based fishing tackle company, reported a sharp rise in first-half sales, driven by strong demand for fishing gear from new anglers as a Covid-safe activity. Sales for the six months to June 30 increased by 36 percent to €159.6 million. The bottom line turned around to a net profit of €18.1 million from a loss of €3.8 million in the same period a year ago.
Sales went up in spite of the company’s exit from some third-party distribution contracts. On a comparable basis, the operating profit was 0.8% lower at €26.3 million, but Rapala said it benefited from a faster-than-expected implementation of its restructuring strategy.
The company warned that 2022 orders would be hit with retail activity in Europe already decreasing as lockdowns have eased and people have resumed their pre-pandemic recreational pursuits. “The general market sentiment in the overall industry is expected to cool down significantly also in North America with a short delay compared to Europe. However, private investments into fishing boats and global trends in outdoor and sport fishing are expected to take the fishing market to a somewhat higher level than prior to the pandemic,” Rapala said.
Sales in North America were up 73 percent to €69.9 million in the first six months, driven by “exceptionally strong” demand for fishing gear. Regional distribution centers operated at full capacity compared with pandemic-forced shutdowns a year earlier. Sales were up by 13 percent in the Nordics to 25.3 million as good winter conditions boosted participation in ice fishing. In the rest of Europe, sales rose by 13 percent to €46.8 million, with the demand starting to recover despite government restrictions continuing in some of the region’s biggest markets. Revenues from the rest of world rose by 38 percent to €17.6 million.
Under Rapala’s restructuring plan, its plant in Batam, Indonesia, was closed in only seven months’ time, requiring lower expenditures than planned, while the consolidation of its Nordic distribution centers was carried out 21 months ahead of schedule. A new centralized distribution center has opened in Estonia.
Rapala said it has already cut “a significant number” of stock lines (SKUs) in Europe and globally in soft plastic categories with further reductions scheduled for all other regions and categories “to execute the largest … clean-up in the company history.” “Additionally, we will consolidate our brand portfolio to favor future winners. We are preparing for massive marketing campaigns ahead of the launch of Okuma rods, reels and combos in Europe in 2022,” the company said.
