Amer Sports: “Wholesale customers have decreased by more than 1,000 in the U.S. in 18 months”

A financial and strategy update from Mavic and ENVE parent Amer Sports has illustrated the reasons for the firm’s gradual shift of focus the group’s attention on consumers.

Like Dorel, Amer has been heavily impacted by the closures of a large number of sporting goods stores in the U.S. leading CEO Heikki Takala to declare that omni-channel will now push ahead at “max speed“. Though this statement from the CEO primarily focuses on Amer’s non cycling businesses, there are clear signs that its brand’s direct relationships with consumers have become more important.

“For the brands, it is all about the ability to adapt their engagement and commercial model,” starts Takala.

“The number of our wholesale customers has decreased by more than 1,000 stores over the last 18 months in the US. This has eliminated 4–5% of Amer Sports’ US sales and more than 2% of the Group’s total sales. The same phenomen has occurred throughout the whole US retail sector – not just in the sporting goods business. In the US, the retail floor space per consumer has traditionally been much bigger than in other markets”, Takala explains.

“There is too much retail space in the USA. In addition, the stores that have been left behind have been unable to keep pace with the changes in consumer purchasing behavior. The strong brick-and-mortar players have built e-commerce stores, enabling them to take a sufficient share of the online consumer purchases and remain strong.”

In tandem with these closures the prominence of brand stores has increased, as have volumes of online bought goods. As such Amer is channeling its investments into developing its direct to consumer business.

“We have followed our strategy and invested in our own stores and e-commerce, which is already generating 10% of the company’s sales and, in the most relevant categories – apparel and footwear – direct to consumer is already up to 25% of the sales,” said Takala, whose aim is to double this channel’s growth in the next three to four years.

“We already have almost 300 retail stores and soon 100 e-commerce stores, and annual Direct to Consumer sales are approaching EUR 250 million. We aim to record up to EUR 450 million of direct to consumer sales by 2020 and, with our target of opening 25 new stores every year, we will have 400 stores by 2020. But it’s not all about new openings: we expect to grow same store sales directionally at mid-single digit every year as we continue improving our retailing capabilities. And we expect online store sales to increase even more rapidly than our retail sales as the consumer shopping habits continue evolving towards online.”

e-Commerce now accounts for around 4% of the business’s sales, while dedicated online resellers make up a further 10%.

“Amer Sports brands have made continuous progress and increased their market share, which means that we have been doing the right things. However, with overall lower number of retail stores in the market, particularly in the US, the growth is now more challenging and more expensive – we have been and are compelled to build more distribution ourselves.“

Amer’s own store network already boasts 1,000 employees, as well as hundred of e-Commerce and digital marketing professionals.

Of this Takala says that a shift in consumer buying behaviour has meant “striving to strengthen our entire operating model for faster-paced shopping with smaller unit volumes and higher margins.”