Owing mainly to its continued rapid expansion in Germany, Jack Wolfskin saw its sales jump by 33 percent to €129.6 million in 2006. The company had already achieved nearly the same growth rate in 2005 and it aims to continue at a similar pace this year by heading resolutely eastwards.
Germany still makes up 80 percent of the company’s turnover, but the brand has widened its distribution to sell in general sporting goods stores, for example through a special agreement with Intersport. At the same time, it has quickly built up a network of 117 mono-brand stores around the country, for the most part franchised. Furthermore, the company has made heavy investments in marketing, from TV commercials to billboard advertising at five leading German football clubs.
Jack Wolfskin’s sales in Germany again jumped by about 35 percent in 2006, with an increase of 40 percent for franchised stores. The company is now taking its retail concept further by opening stores in travel-oriented locations, as illustrated by an outlet which it opened at Frankfurt airport in May.
The brand has used some of the same methods to reinforce its business in Austria and Switzerland. As a result, sales increased last year by 32 percent in Switzerland, where Jack Wolfskin has seven stores, and by a whopping 58 percent in Austria, aided by eight franchised stores. Belgium, the Netherlands and the UK are the next targets for more investments and store openings, while Jack Wolfskin’s business in Southern Europe remains weak.
For the next years, the company is banking on faster growth in Eastern Europe. The outdoor brand has been sold in Russia for the last three years by Peter Sport. In Poland, it has been carried for the same period by Fam, a chain of eight outdoor stores, and it has opened a mono-brand store in Gdansk. The focus for the next months will be on the Czech Republic and Hungary, where Jack Wolfskin is only distributed on the a small scale for the time being.
While the brand’s European operations are handled by Manfred Barme, the company has recruited another executive, Tobias Tennstedt, formerly at Bertelsmann, to take care of its Asian expansion. Jack Wolfskin already has a licensee in Japan, Caravan Co., which has turned the country into the brand’s second-largest market. It also has sealed fresh deals in China and South Korea, where deliveries will begin in September.
The strong and steady expansion of its business has prompted Jack Wolfskin to invest in new infrastructure. Over the next two years its warehouse near Hamburg will be extended from 21,000 to 30,000 square meters, with an option to grow to 50,000 sqm.. Also, at the end of 2007 the company will begin construction of a 3,000-square-meter research and development center at its head office in Idstein.
