Sports & Leisure
Sports & Leisure includes several internationally well-known sports brands like AHEAD, Auclair, Craft, Cutter & Buck and Seger.
In the Sports & Leisure segment, New Wave Group offers clothes and shoes for the active consumer from several fully-owned brands. The range is adapted to different uses and activities, from basic garments to high-tech products for extreme exercising. Most of the segment's sales are to the retail trade, such as sports, golf, hunting, fishing, shoe and fashion trade, but sales are also made to promo resellers.
The segment has most of its sales in the Nordic region and North America, but Central Europe is also an important market and then mainly Germany and the Benelux area.
New Wave Group has a portfolio of strong sports brands within different areas. The Group’s main strategy is to own and hence develop brands, which is why licensing and distribution rights have not been part of the core business historically. However, the Group has the distribution right for the brand Speedo on the Scandinavian markets.
All brands in the operating segment have the retail trade as their natural channel to meet the market. It is also here that the segment has most of its net sales (74 %). Trademarks such as Craft, Seger, Clique Retail and Speedo have an established position within the sports trade and Cutter & Buck and AHEAD in the golf sector.
In the Sports & Leisure segment, New Wave Group offers clothes and shoes for the active consumer from several fully-owned brands.
The products are also sold in the promo sales channel and mainly to sports associations. Promo sales are expected to increase as Craft’s focus on new products for associations and clubs has developed well. The promo sales channel places demands on high service level and availability. A company or association that, for example, orders promowear is dependent on the supplier being able to deliver a full size sorting and the right colour. For example, if New Wave Group cannot deliver medium or the end customer's colour choice, then they will choose another supplier. The Group's objective within promo is to deliver 98 % of its products within 24 hours.
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 segment's capital tied up in inventories is relatively high, but differs somewhat between the sales channels.
In the retail trade, sales are largely done through pre-orders compared with the promo market where delivery is made directly to orders. This means, for instance, that the retail customer places orders in the spring for goods to be delivered in the autumn. Approximately 65-70 % of sales in the retail trade take place through pre-orders. In connection with orders from customers, the Group places orders at the factory, which significantly limits the obsolescence risk. The remaining sales in the retail sector, so-called complementary sales, are mainly basic goods with a limited fashion risk.
The bulk of the inventory relating to the retail trade has less fashion sensitive areas such as Craft's functional underwear and club collections as well as Clique's basic garments.
The capital tied up in inventories for promo is higher but is a prerequisite for success in the promo sales channel. A company or association that, for example, orders promowear is dependent on the supplier being able to deliver a full size sorting and the right colours. However, the risk of obsolescence is low because a larger part of the range is timeless basic products that there is a need for season after season. Many of the products are common to both the promo and retail channels, which offers risk diversification, and means that catalogues can also be in common.
In order to limit the currency risk in the retail channel, approximately 50-75 % of the currency-exposed purchasing costs are hedged. Within the promo sales channel, adjustment for changed purchasing prices is made continuously as it is about immediate sales. The currency risk can thus be limited.
Regarding the capital tied up in accounts receivable, sales are made to selected retailers and the credit losses are low. However, there is a higher concentration to a fewer number of retail customers compared to the promo market