[NETTAVISEN] : XXL is still struggling and the start of 2024 shows declining sales figures. The sports chain sold goods worth 1.6 billion in the first three months of the year, figures presented on Wednesday show. It is clearly weaker than last year when they sold for 2 billion.
A year ago, XXL struggled with excessively large inventory, and had to run super sales, with low profits.
Now the opposite has been the problem, they have had a shortage of goods.
– It is clear after a demanding period for XXL, so we were quite conservative with purchases before the winter season. And it has paid off, says XXL boss Freddy Sobin.
Sports equipment has a long delivery time, often nine to 12 months, and therefore XXL couldn’t move when they saw that the winter weather was coming.
– We did not expect that this winter would be one of the best in a long time weather-wise. We haven’t had enough products in stock to meet the high demand, he says.
– We think we have control
– You have been in a situation where you had far too much in stock, and then you went to a situation where you had far too little in stock. Are you in control?
– Heh-heh, yes, we think we have control, but we are not sitting with the fortune-telling ball. If you look at the last few winters, none have been like the one we have now put behind us. But I don’t want to sit here and explain everything with wind and weather, but it is clear that when we have ordered goods we have looked at the history.
The failing sales figures follow a series of bad news for XXL. At the beginning of February, the company presented miserable figures for 2023. The result was a loss of a whopping NOK 1.5 billion.
After this, Tiedemann’s tobacco heir Johan Andresen has joined the ownership side, and this has lifted the company’s share price.
Large department store cuts
At the start of this year, XXL closed a department store in Finland. But this is hardly the end of department store closures.
– When we don’t believe in long-term profitability for a store, we close, says Sobin.
He emphasizes that, in sum, they should not have fewer stores, and that it is mainly a matter of moving stores and downscaling.
How many stores are you considering closing?
– For the rest of the year, we will take out 15-16,000 square metres. We will primarily relocate, i.e. change location, and we will make stores smaller in area.
I think the rental prices are unreasonable
– It is not about having fewer stores, but if we do not think they will be profitable, then we will close them and try to find a new location. Over time, we see that we will have more, not fewer, stores, he says.
The rental prices are one of the things that make the situation difficult for XXL.
– We believe the increases are completely unreasonable. In Sweden, which is perhaps the hardest hit, rental prices in general in the market have increased by 20 per cent over two years, says Sobin.
– It is clear that we must react forcefully. Here we have to find a completely different long-term solution together with landlords, he says.
