New Wave Group, a Swedish group that has become a respectable owner, distributor and licensee of various sports brands in the last few years, is gearing up for the launch of a full-fledged sports division at the beginning of July. The combined sales of sports products under this new unit, called New Wave Sports AB, reached about 550 million Swedish kronor (€58.8m-$90.7m) in 2007, placing it among the largest Swedish sports companies.
New Wave Sports will regroup four of the sports units in the New Wave Group: Craft of Scandinavia, the fast-growing brand of sports underwear; Seger Europe AB, owner of the Seger brand of knitted hats and socks; Seger United AB, distributor and licensee for a raft of sports brands; and New Wave Mode AB, which sells the Clique brand of basic sports apparel to sports retailers as well as supermarkets.
Cutter & Buck, the golf apparel brand acquired by New Wave Group last June, will not be integrated into the sports unit from the start. Fredrik Stenberg, former marketing manager at Nike Sweden, joined New Wave in March to take charge of the golf brand’s roll-out across Europe. It will be determined over the next months to what extent Cutter & Buck will lean on existing distributors, and which parts of the business might be placed under the New Wave Sports unit.
Based in Boras, the sports division will be headed by Jens Petterson, managing director of Craft until the beginning of 2007 and since then in charge of what was known as the New Wave retail division, dealing with sports products as well as home interior products. Meanwhile, the managing directors of three sports companies under New Wave Group will become division managers reporting to Petterson. Hans Larsson, who succeeded Petterson at the helm of Craft, will continue to head the brand as a division manager. Lennart Johansson will lead the Clique business, while Per Segerkvist will be in charge of all activities formerly under Seger United as well as Seger Europe.
Until last September Seger United was steered by Jonas Georgsson, but he left the company and his task was taken over by Segerkvist. A member of the family that established Seger, Segerkvist had already been the managing director of Seger Europe for several years. Seger United has a license for Umbro in Sweden and since last year another license with Speedo for Sweden, Norway and Denmark. Furthermore, it has distribution deals with Exel, Rollerblade and Easton in Sweden, and with Nordica for Sweden and Finland.
The merger of the four units into New Wave Sports is primarily meant to achieve synergies in terms of back office and distribution. For the time being each of the units has its own administration and warehouse, but they will all be merged into a new distribution center. Two of the existing warehouses, belonging to Seger Europe and Seger United, are in Gallstad, west of Gothenburg. One of them will be used as extra manufacturing space for Seger, which already has a part of its knitting factory in the same building, while the other will be rented out. The Craft warehouse in Dingle, where Craft was launched, will be kept as well because the adjacent facility for corporate products was running out of space.
A new distribution center of 20,000 square meters has been built by New Wave in Ulricehamn, about an hour’s drive to the west of Gothenburg. All the sports units will move in one after the other until next January, starting with Craft in July.
The move comes after another year of substantial growth for the New Wave group, with sales up by 19 percent to 4,194 million SEK (€448.5m-$691.9m). However, this figure included organic growth of only 3 percent, while the rest was attributed to acquisitions. This relatively low organic growth was blamed on the integration of Cutter & Buck, as the management diverted investments earmarked for the expansion of other brands to prepare for the roll-out of the golf brand. The group also admitted that, although the integration was on track, it would take longer than expected for the synergies to show in its results.
Craft of Scandinavia performed strongly last year, with double-digit sales growth both in Sweden and abroad. In its home market, Craft achieved sales of about 144 million SEK (€15.4m-$23.8m), up by 10.8 percent, as demand increasingly moved from specialist stores to general sports stores. Sales outside Sweden grew by 13 percent to 390 million SEK (€41.7m-$64.3m), with particularly strong gains in other Scandinavian countries and in Russia.
