Bertel O. Steen, a Norwegian conglomerate that owns 70 percent of ASICS Scandinavia, has acquired the leading Norwegian footwear brand, Viking Fottøy, from the Dutch Hevea group for €29 million. The takeover will give the group a firm footing in both the athletic and brown shoe segments, shielding it from the consequences of climate change through Viking’s wide range of rubber boots and Gore-Tex lined boots. Together, ASICS Scandinavia and Viking will have annual sales of about 600 million Norwegian kroner (€72m-$93m), almost equally split between the two operations.
There will be no change in management, but Håkon Nygård, who runs ASICS Scandinavia, will also act as chairman of Viking, replacing Peter Traas, chairman of Hevea. Viking and ASICS Scandinavia will continue to be managed separately, but Nygård has many ideas to improve Viking’s brand positioning through better marketing, as he has done with the ASICS brand in Scandinavia.
Bertel O. Steen is a big group with sales of €950 million in 2005 that started up after World War Two to import cars and other products. It has investments in real estate and industry. Its sports division imported brands such as ASICS, Descente, Dynastar and Castelli, but it then decided to concentrate on ASICS, forming a joint venture with the Japanese company in 1999 that took over the distribution also in Denmark and Sweden. Under the management of Nygård, it has done an excellent job with this brand, as detailed in our market research report on Scandinavia and the rest of Northern Europe coming out next month.
Founded in Norway in 1920, Viking was sold by Orkla in 2000 to Hevea, a Dutch rubber boot manufacturer owned by the Vredestein group. Hevea, was spun off through a management buy-out in 2004. Hevea has now decided to concentrate on its licensed brand of Dunlop rubber boots and protective footwear, used mainly for industrial applications, after attempts to create some distribution synergies with Viking. Hevea, which has its origins in the production of tires for bicycles and cars, had sales of €60 million in 2006, including Viking.
In the meantime Viking has improved its profitability and its market positioning, while expanding geographically, mainly in the Nordic countries. It had an operating profit of 24.75 million NOK (€2.9m-$3.8m) in 2005 on sales of 287.1 million NOK (€34.4m-$44.7m).
A partner of Gore-Tex since 1992, Viking has strong ambitions in the international market, although the Nordic countries still represented 93 percent of the company’s sales in 2005. Non-rubber boots comprised 43 percent of the turnover, its rubber boots 26 percent and the distribution of KangaROOS in the Nordic countries 17 percent. Viking sells a total of about 2 million pairs annually, including 1.5 million under its own brand.
The company has about 3,800 clients in the Nordic countries, 60 percent of whom are shoe retailers and 20 percent are sports stores. Its orders are still on the rise in Denmark and Sweden, particularly in the segment of Gore-Tex shoes, but in the last few months Viking has made further inroads into Continental Europe. After signing a distribution deal in Switzerland in 2005, it began with a distributor in Italy early last year. Germany remains the company’s main focus for the moment. Having hired last March a dedicated salesman for Germany and Austria, Viking expects to sell about 15,000 pairs of shoes in those two countries this year. It has already won over about 100 customers in Germany’s highly competitive market, mostly in the southern part of the country.
For Viking, which was losing money before it was acquired by the Dutch-based Hevea group in 2000, the other ambition besides international expansion is to reach an operating margin (EBIT) of 10 percent by 2008, and the company is well on its way to reach this target under the management of Rune Skrove, a former finance director of the company who became Hevea’s managing director for the Nordic countries in the Spring of 2003. He will continue to run Viking.
The company’s financial turnaround came after 2001 when Hevea took the Norwegian company out of the wholesale trading business to focus it on its own brand, and then began to set up its own sales operations in the other Scandinavian countries and in Finland. Viking still sells some 700,000 pairs of rubber boots, mostly in Scandinavia. In the rubber boot segment it claims market shares of 50 percent in Norway and about 25 percent in the other Nordic countries. It has a share of 30 percent in the Norwegian market for Gore-Tex shoes, estimated at about 1.5 million pairs. Together with ECCO, the brand is also regarded as a leader in children’s footwear throughout the Nordic region (more in Shoe Intelligence).
