Arktis Holding, the group that controls all of Norrøna's operations, suffered a 24 percent decline in profits for 2018, after many years of steady growth. Net income landed last year at 61.6 million Norwegian kroner (€6.18m-$6.84m), while the turnover decreased from NOK 635 million in 2017 to NOK 630 million (€62.9m-$69.9m).Norrøna's chief executive, Jørgen Jørgensen, told Sportsbransjen's magazine that he was unhappy with the results, citing delays in the delivery of new products as the main reason for the decline. The delays led some stores to cancel orders and caused other orders to be delivered in 2019 instead of 2018. In addition, a strong dollar impacted the Norwegian company's results as well as its large investments in production, efficiency and technology, intended to meet an uncertain retail future.
Jørgensen said he believes that the effects of the investments will be more visible in 2020 than in 2019. He also stated that the company remains solid and can therefore make the investments needed. The group's equity increased by NOK 40 million to NOK 372 million (€37.1m-$41.2m) last year.
Norrøna now has 25 stores spread across Norway, Sweden, France and Switzerland. As previously reported, the brand opened its first store in Colorado in the U.S., and a new large store is in the works in the SoHo area of New York City. The plan is to develop five new stores a year, most of them abroad, despite the fact that e-commerce is taking up an ever-larger part of the market.
This expansion and a focus on e-commerce have led to a 10 percent reduction in the number of external stores that Norrøna works with. This may negatively affect sales in the short term, but the company believes it is the correct business model for the future.