Björn Borg has acquired Baseline Group, its Dutch and Belgian distributor, which is an important step in the Swedish company’s “quickened vertical integration. This fits the strategy to have closer connections with the consumer and retailer”.
Largest market, even bigger than Sweden
Björn Borg will become Baseline Group’s new owner on 2 January 2017. The group handled several things for the fashion group in Belgium and the Netherlands, including the underwear and sporting fashion’s wholesale operations, its 12 concept and outlet stores and the entire local logistics operation. Baseline Group’s 90 employees generated a 23.3 million euro turnover for Björn Borg in 2015.
The Benelux is actually the brand’s largest market, generating 26 % of turnover, which is even better than the company’s home territory, Sweden. The brand’s sports clothing line, which is one of its essential product lines, is represented best in the Benelux.
The Swedes will pay 1.25 million euro for all shares and shareholders loans for a period of 3 years. As part of th deal, Björn Borg will also acquire all of the working capital financing from local banks, up to 2.8 million euro. The Group’s debt with rent will also increase with the same amount.
“Timing is perfect”
“Acquiring our Benelux activities enlarges our potential for this important market. We can also improve our trade’s continuity building on the current platform. This is an important investment for future growth”, CEO Henrik Bunge said.
Baseline’s addition to the Björn Borg group will boost the company’s annual net turnover some 100 million Swedish krona (10 million euro) and the group sees “major opportunities to generate higher turnover and profit in the Benelux area, both from optimized internal procedures and from increased sales in our own stores and through third parties.”
Bunge feels the acquisition is ideally timed: “Our timing is perfect, because 2017 will be the first year we no longer have to pay the former Björn Borg owner as part of the earn out settlement. This will boost our financial power, allowing us to take this step.”
