Hummel, the Danish team sports brand, is reinforcing its management structure in Germany as it continues to expand swiftly around Europe, distinguishing itself as one of the brands that managed to carve a sizable market share for themselves by doggedly focusing on their specialty.
Stefan Kock, former sales director for performance products at Puma, has been appointed in the new position of sales director for Hummel in Germany, Austria and Switzerland. He will report to Jens Binek, the longtime chief executive of Hummel's subsidiary in Germany, where the brand should again achieve a sales increase of more than 25 percent this year.
Hummel's robust sales in Germany have helped it to recover from two rounds of bankruptcy proceedings, which ended in 1994 with the brand's acquisition by the investment firm of the Danish Stadils family. Søren Schriver then became Hummel's chief executive and a minority shareholder, while Binek took charge in Germany.
Since then, Hummel has been steadily rebuilt to reach sales estimated at about €160 million this year. The brand has grown at an average annual rate of about 20 percent for the last few years, still focusing mostly on Europe and on team sports.
An important aspect of Hummel's expansion is that it has been able to deliver small quantities in a short time: Hummel has set up what it describes as express production, enabling it to deliver re-orders into Europe just 20 days after the order is received, including shipping from the Far East.
This tactic is strongly appreciated by European retailers: It makes it easier for them to tightly manage their inventories, by making smaller pre-orders and getting re-orders rapidly when required. The brand's European warehouse, based in the north German town of Flensburg, is equally convenient (and relatively cheap) for fast deliveries.
Team sports products make up about 70 percent of Hummel's turnover in most European markets, while the remainder consists of leisure products. An estimated 75 percent of the turnover stems from apparel, but footwear has been expanding as well: While Hummel was always strongly established with its specialist handball footwear, it started offering other types of athletic shoes about five years ago.
Apart from Germany, Hummel has been making rapid headway in the Netherlands and in France. The company is among the leaders in the handball market for each of these countries, but the expansion mostly comes from other team sports and leisure apparel and footwear. The brand is still building up its business in Norway and Sweden, and it has moved ahead with the opening of 35 stores with a partner in Turkey three years ago.
The only European market where Hummel has a diverging approach is in Denmark, where the brand is known by all. Hummel has been worn by the national football team ever since it started wearing branded shirts, so that the brand has a tight relationship with the country's sports consumers.
Widely spread among Danish teams at grassroots levels, Hummel makes more than 40 percent of its Danish turnover with team sports products. But at the same time, the brand is sold to about 150 Danish children's clothing stores, which make up 25 percent of its turnover in the country, with the remainder consisting of lifestyle products.
Denmark remains Hummel's largest market, making up about 30 percent of its turnover this year. This amounts to more than €35 million, which is in the same range as Adidas and Nike in the Danish market. Hummel has achieved this by working with all the country's leading sports retail groups, but still keeping a tight grip on its distribution.
Another less predictable market that has been contributing to Hummel's expansion is South Korea. With Japan, this is the only market where Hummel is selling outside Europe, since it pulled out of China a few years ago for a variety of reasons.
Hummel teamed up 14 years ago with Daewon Inos, a Korean partner, which has since opened nearly 130 mono-brand Hummel stores. The partnership previously focused only on team sports products, and the licensee made about half of its turnover by selling directly to teams. However, the agreement was extended last year to encompass lifestyle ranges, enabling the Korean company to open stores with a wider appeal.
Only a few products for the lifestyle range are picked from Hummel's international offering, while most of the products are sourced by the licensee in Korea, to make sure the size and fit are adequate. The Korean licensee even came up with a diverging logo, consisting of just “H,” for its lifestyle range.
The brand made inroads in the Korean team sports markets by putting together its own second-division team, Hummel FC, consisting of young players who played half of the day and otherwise worked for the brand. Hummel is further endorsed by three of the 16 teams in the top Korean football league. Remarkably, none of them is sponsored by Nike, even though the brand's relationship with the national football federation helped it to become the market leader in Korea.
The extended license was accompanied by a team of advisors from Europe, who helped the Korean licensee to work on a store format for a wider range, to be adopted by the franchisees. Since then, the licensee has also started supporting Hummel with advertising and partnerships with Korean pop stars.
More about the Korean sporting goods market in the next issues of SGI Europe.
