Swedish underwear manufacturer Björn Borg has managed to increase sales 2 % in its third quarter, while its profits grew more than 50 % thanks to tough cost-cutting measures and slightly higher margins. Its own stores still struggle, though.
Below its own expectations
The Swedish textile group, which has 9 of its 13 companies operate under the Björn Borg brand, considers its third quarter to be "acceptable", even though its CEO Hendrik Bunge admits sales "were not quite as high as we had hoped". The group had a 163.7 million krona (17.7 million euro) turnover, which is a 2 % increase thanks to favourable exchange rates: underlying sales remained pretty much flat.
Profit grew 55 % to 24 million krona (2.6 million euro), thanks to "a strict cost control, discontinued operations in China and a slightly higher gross profit margin" (52.4 % compared to 51.8 % last year).
Own retail branch under pressure
The CEO also divulged that there was a "further decline in brand sales and a negative trend in group-owned Swedish stores". That is why he announced that the retail organisation "is being restructured as a result of poor profitability and sales growth since 2010".
Björn Borg managed to limit the damage thanks to "a larger Christmas collection shipped by our underwear product company, good growth in our e-commerce and continued growth in Finland and England."