United Brands of Belgium is expanding both its retail and wholesale operations. The group is targeting sales of about €40 million in two years’ time, on the back of organic growth as well as store openings.
United Brands should have featured in our European retail chart for last year, as it reached sales of about €35 million including VAT for the year ended in April 2010, slightly more than our estimate for Primo, the Belgian retailer owned by the USG group in the Netherlands.
This tally amounted to a sales increase of 9.4 percent in comparable terms, and the retailer’s turnover is continuing to rise sharply this year. The improvement is attributed to a move away from lifestyle and a sharper focus on performance products, particularly in football, running and winter sports.
United Brands has 11 multi-sports stores trading under the UB banner in Flanders, with sizes ranging from 1,500 to 2,500 square meters, and another two much smaller UBX stores focusing on snow and surfing products. Before the end of the year United Brands will complete the takeover of two small independent stores in Ostend and Knokke. Its selling surface will be further enlarged in the last quarter of next year with the move of its store in Leuven to a larger building, which will combine existing UB and UBX outlets in a single location with an area of about 3,000 square meters.
United Brands is almost entirely owned by Marc Piessens, its chief executive. Until last year Fortis Private Equity owned convertible bonds amounting to nearly half of the company’s capital, but this financial arrangement was restructured last year, so that the bonds are no longer convertible. They are meant to be reimbursed by the end of next year.
Due to the new repayment schedule, United Brands will not open any more stores in the coming months, but the company estimates that there is space for several more in Flanders. On the other hand, it has no intention of returning to Wallonia, the French-speaking part of the country, where it had a costly misadventure a few years ago.
Separately, United Brands is striving to widen the distribution of Imperivm, a snowboarding brand that it acquired last year. It is sold exclusively in United Brands’ stores in Belgium and in Two Seasons stores in the U.K. Furthermore, Imperivm is sold by agents in France and in Spain, and the company is actively searching for distributors in the German-speaking countries. This wholesale business is included in the reported sales of €35 million for the company’s last full financial year, but made up revenues of less than €0.2 million.
Another part of United Brands’ wholesale activities is a distribution deal sealed with Rip Curl for Belgium and Luxembourg, starting with the next summer range. The brand has had a subsidiary in Belgium for six years, which will be dismantled in November. United Brands wants to sell Rip Curl in its stores and through other retailers, but it appears that several former customers have refrained from ordering Rip Curl since its distribution was attributed to a rival retailer.
