Upgraded design and functionality as well as investments in editorial contents and online merchandising algorithms have been supporting a rapid expansion across the Nordic countries for Sportamore, a multi-sport online retailer based in Sweden. Sportamore's turnover surged by 46.6 percent to 542.3 million Swedish kronor (€59.1m-$67.0m) last year and its business became profitable in Sweden.
About 65 percent of the turnover still came from Sweden, where the group's sales advanced by 28 percent for the year. They more than doubled in other Nordic markets, making up the balance of 35 percent of Sportamore's turnover. The retailer covers all of these markets from its office and warehouse in Sweden.
On the other hand, Sportamore saw its operating loss widen to SEK 37.5 million (€4.1m-$4.6m) last year, compared with SEK 13.2 million in 2014, but it achieved an operating profit before amortization (Ebitda) in Sweden for the first time. It was still a small operating profit of SEK 0.6 million (€0.06m-$0.07m), against a loss of SEK 3.4 million in 2014.
The company says the improvements were driven by wide-ranging changes in the design of its desktop and mobile sites, with more functionalities for searches and design, and the opening of an editorial department that publishes content for its 3.5 million visitors.
Sportamore says it had about 550,000 active customers at the end of the year, or 150,000 more than a year earlier. The latest investments have stimulated repeat orders: About 37 percent of the buyers currently return within 90 days to make their next purchase. The rise in sales is thus generated by more active users as well as stronger commitment from customers and more spending per purchase.
The largest sports categories for Sportamore are running and training, which continue to drive the sales growth along with football, sportswear, outdoor and children's products.
The retailer reported record levels of visits and orders in the last quarter of 2015. It boasted more than 10 million visits for the first time for a three-month period. November was the first month when it received more than 110,000 orders in a single calendar month.
The company's turnover climbed by 47 percent to SEK 174.5 million (€19.0m-$21.6m) for the last quarter, despite unfavorable weather conditions. The strongest growth took place outside Sweden, which made up 37 percent of the revenues.
The gross margin improved by 2.2 percentage points to 34.4 percent. Operating earnings of SEK 1.2 million (€0.13m-$0.14m) compared with a negative figure of SEK 7.3 million in the same quarter a year earlier. The operating profit reached SEK 6.6 million (€0.7m-$0.8m) in Sweden, where marketing investments returned to a normalized level. Sportamore continued to invest more forcefully in other Nordic markets, leading to overall marketing expenses of SEK 22.1 million (€2.4m-$2.7m).
Sportamore moved to the Nasdaq Stockholm stock exchange as a small cap in May 2015. In the prior three years, the company was listed on Nasdaq First North, a stock exchange counter for smaller, fast-growing firms.
Established in 2009 by a former Nike manager, Sportamore started trading in Sweden one year later and in other countries from 2012. The retailer prides itself on selling about 15,000 products from 300 brands for 30 sports, with only a small and unspecified portion of sales coming from private labels.
The company has won several awards for its wide technical range and its customer service, with free shipping and returns within 30 days, plus customer assistance both by mail and phone. The latest upgrade has earned Sportamore another distinction as the best e-commerce website in Sweden, on behalf of Internet World for 2016. The online retailer already received this prize three years ago.
