Business area Sports & Leisure includes several famous international brands like Cutter & Buck, Craft and Seger. Business is conducted with 8 brands in 13 countries, primarily in the Nordic countries and North America. Two licensed brands are sold alongside the company’s own brands in Sweden, the business area’s domestic market. Sports & Leisure answered for 38% of the Group’s sales in 2009 and SEK 122.1 million of the Group’s profit (EBITDA). The business area has been charged with SEK 7.1 million in restructuring costs. Most of the sales relate to the retail market (sports retail sector) but some sales also stem from the corporate promo market.

The market
The Swedish sports retail sector reported sales of about SEK 18.5 billion in 2009 and about 7% in growth compared with 2008. A group of large-scale chains and purchasing groups dominate the sports retail sector which also comprises independent shops. The chains have grown constantly in strength and expanded distribution while independent multi-sports shops have declined and either disappeared or been incorporated in a chain. Specialist niche shops for outdoor activities, cycling, running, etc. upheld a stable level and even grew in certain categories. The largest players today are Stadium, Intersport, Team Sportia, Sportringen/Sportex, Naturkompaniet and Löplabbet.

New Wave Group currently does business with six brands in the sports retail sector, namely Craft, Seger, Clique, Cutter & Buck, Speedo and Umbro. The Group has integrated all business activities in New Wave Sports AB. New Wave Sports is one of Sweden’s largest sports wholesalers, providing the Group with a considerably better negotiating position in dealing with large purchasing chains. Through this our customers enjoy much better service in terms of placing orders, logistics and invoice processing. New Wave Sports' distribution centre is located in Ulricehamn.

Cutter & Buck
Cutter & Buck is a world-leading US brand in exclusive golf apparel that was founded in Seattle, USA in 1990. The brand is sold via several different distribution channels, including the golf retail sector, the corporate promo market, the fashion retail sector and directly to the consumers (ecommerce and mail order). The objective is to build up a strong position in the golf and ready-to-wear sectors also in the European markets in the long term. Cutter & Buck is a strong platform in the North American market to introduce existing concepts.

Craft
Craft is the obvious choice for genuine sports lovers at all levels, from elite athletes to casual exercisers, active in running, cross-country skiing, cycling and Alpine skiing. The products aim to be the market’s most innovative, which is guaranteed through close R&D collaboration with some of the world’s best athletes. Craft has built a credible brand by designing functional base garments for 30 years that revolutionised the world of sports. Sweden is Craft’s domestic market as well as its principal market and answers for over 20% of the annual sales. Defined focus markets with major potential include the other Nordic countries, Germany, the Beneluxcountries and Switzerland. Competitors vary slightly depending on product segment, but the main ones are Adidas, Nike, Helly Hansen, New Line, Swix, Odlo, Falke, Löffler, Björn Dählie, Spyder, Phenix and Kjuus. Craft’s challenge for the future is to reinforce the brand internationally, and achieve the same strong position as in its domestic market.

Seger
For consumers who care about what they wear, Seger is the obvious choice for functional garments. Seger’s expertise, experience and innovativeness make it a brand that with self-confidence and attitude offers the conscious consumer an obvious choice. In the Swedish market, brands like Bula, X-Socks, housebrands and new niche brands are the main competitors. In the export market, Seger is challenged by names like Falke, X-Socks, Bula, Steffner, Eisbaer, and the sports chains’ own brands. Seger is mainly marketed in the Nordic countries, but is now also concentrating export activities to the rest of Europe. Presentely, Seger is available in Finland, Denmark, Poland, Bulgaria, Russia, Czech Republic and Japan. Even more markets will be addressed in Central Europe in 2010-211.

Clique Retail
The products in the Clique Retail collection are primarily basic ready-to-wear, i.e. products that have a high turnover rate and are sold with good profitability for the shops. Clique Retail garments are comfortable and appealing, and stand for good quality in relation to price. Clique Retail’s largest competitors are the sports retail chains’ own brands. It has become our greatest challenge to explain the brand’s simple yet profitable concept: we handle warehousing and assume therefore the greatest risks for lack of profitability. Sweden is Clique Retail’s largest market at present and customers consist mainly of sports chains sector, other retail and everyday commodity sector.

Pax and Sköna Marie
New Wave Group has a company active in the footwear retail sector, Pax Scandinavia AB, which serves as wholesaler and distributors of the Pax and Sköna Marie brands. Pax is quality shoes for “happy children and relaxed parents” and distributed since 1929 in the Swedish and Finnish markets. Main competitors include the footwear retail sector’s own brands plus Kavat, Viking and Ecco. Sköna Marie is a classic, high-quality Swedish footwear brand for women with strict demands for comfort. Rieker, Ecco and the chains’ own brands are the brand’s primary competitors. The footwear retail sector is a highly fragmented one with many independent shops. The largest players include Din Sko, Skopunkten, Scorett and Eurosko.

Licensed sports brands
New Wave Group has a portfolio of very strong sports brands in various areas. The Group’s main strategy is to own and thereby develop the brands. Historically, licensing has not been part of our core business. Below are the licensed brands that New Wave Group markets in the Swedish and Nordic markets.

Umbro
Umbro is a firmly established football-related brand that has global representation. Its head office is in Manchester, England where it was founded in 1924. Umbro designs, develops and markets football-related products sold in 90 countries the world over. Umbro also supplies the Swedish, British, Irish and Norwegian national teams with games and practice uniforms. Umbro sponsors several international professional clubs and prominent individual stars like Michael Owen, John Terry, Deco, Hernand Crespo, Anders Svensson and Jessica Landström.

Speedo
Speedo is the world-leading swimwear, bathing clothes and equipment manufacturer, with products for adults and children, casual swimmers and elite swimmers. Speedo focuses on high quality and functional materials. At the 2008 Olympics in Peking, 93% of all gold and 87% of all medals were won in a Speedo LZR Racer. Speedo was founded in Australia in 1928.

Sales channels
The retail sector is the natural channels for meeting the market for all the business area’s brands. Craft, Seger, Clique, Umbro, and Speedo all have a verified position in the sports retail sector. 2009 was a tough year and sales in the corporate promo segment and to sports clubs decrease by about 20%.

Capital tied up
New Wave Group’s objective is to keep the stock of fashion items low since the lifespan for these items is short. The retail sector focuses on less fashion-sensitive areas, such as Craft’s function base garments and Seger’s socks. In the retail sector sales consist largely of advanced orders compared with the corporate promo market where deliveries are made directly against order. This means, for instance, that the customer places an order in the spring for delivery in the autumn. About 70–75% of the sales in the retail sector are advanced orders. In conjunction with orders from customers, the Group places orders with the factory, which significantly reduces the risk of obsolescence. The rest of the sales, called supplementary sales, are primarily base items with limited fashion risks. In order to limit its foreign exchange risk, the company hedges between 50 and 80% of the purchasing costs. Sales are made to selected retailers and credit losses are low. However, there is a higher concentration to fewer customers in the retail segment compared with the corporate promo segment. In 2009, confirmed bad debt losses in the business area made up 0.35% of the sales. Most of the products are the same for corporate promo and retail, which provides a significant risk diversification. Moreover, the two sales channels can use the same catalogues.