Bjorn Borg Targets London, Berlin in Growth Push Leading to U.S.
(Bloomberg) -- Bjorn Borg AB, the underwear and sportswear label named after one of Sweden’s best-known tennis players, plans to expand in the U.K., Germany and the U.S. as it sets its sights on becoming a global brand.
In recent years, Bjorn Borg has mostly focused on the Nordic and Benelux countries. But to continue growing after 2019 (when its current five-year plan ends) the company will now start doing more in the U.K. and Germany, after which it expects to target the U.S., Chief Executive Officer Henrik Bunge said in a Sept. 7 interview.
“To make Bjorn Borg a global, iconic brand that you can find everywhere, the U.K. and Germany is the next step,” the CEO said at the company’s headquarters in central Stockholm. “Toward the end of the current business plan, in 2018 and 2019, it’s time to look at most probably the U.S.”
Since Bunge took over in 2014, a brand associated with brightly colored underwear has become a sportswear label that offers sweaters, pants, tights, shorts and skirts. That’s coincided with a so-called athleisure fad, whereby people also wear sports clothes outside the gym.
The shares rose as much as 5.3 percent in Stockholm trading, the steepest intraday advance since May 10. After two hours of trading, volume already exceeded the average daily total in the past three months. The stock was up 4.4 percent as of 11:08 a.m. local time.
The fame of Bjorn Borg the man -- a five-time Wimbledon tennis champion -- should be global enough to help the company compete with sportswear giants such as Nike Inc., Adidas AG, Under Armour Inc. and Lululemon Athletica Inc., Bunge says.
“If you want to become the biggest in the world, you need to be big in the U.S. so of course we need to expand there,” he said. “There’s already a strong presence in the U.S. in terms of Bjorn Borg the individual, and all he’s done.”
The company already has an online presence in the U.S., but volumes remain small, Bunge said. (The hour-long interview was done standing up because the CEO had removed all chairs from the conference room to ensure meetings are more efficient. Friday workouts are compulsory for all employees working at the company’s headquarters.)
In the U.K. and Germany, Bjorn Borg plans what it calls a “city attack,” starting in London and Berlin. It has yet to decide whether to open its own stores, find a wholesale partner or sell through department stores. It already sells some products in London’s Selfridges, House of Fraser and John Lewis department stores. The company also plans to make online sales a big part of the expansion.
“We need to own London,” Bunge said. “That means that if you walk down Oxford Street, you’ll see Bjorn Borg in House of Fraser, John Lewis and Selfridges. We’ll use the same approach in Germany.”
Bjorn Borg has already tried to expand in those markets but without any major success.
The U.K. and Germany generate less than 10 percent of total sales today, but “will be responsible for our growth from 2019 and beyond,” Bunge said. “The U.S. will take time, and be expensive, so we need Germany and the U.K. as functioning locomotives before we expand there.”