The Group’s stable profitability and the successful positioning of the Björn Borg brand largely originate with the business model, which facilitates a geographical and product expansion with limited operational risk and capital investment.
Björn Borg’s business model utilizes the Group’s own companies as well as a network of distributors and licensees, which on the basis of a license from Björn Borg manage a product area and/or a geographical market. The network also includes Björn Borg stores operated by either the Group or external distributors or franchisees. Björn Borg owns strategically important operations at each level of the value chain, from product development to distribution and retail sales.
Through the business model with a network of its own units and independent partners, Björn Borg can be involved in the key parts of the value chain and develop the brand internationally with a compact organization and limited financial investment and risks. The business model is relatively capital efficient, since the external licensees and distributors in the network are responsible for marketing, including investments and inventory in their markets. This model, which combines in-house operations with independent partners, generates substantial consumer sales with limited risk and investment for Björn Borg.
Due to the termination of the distributor for Benelux, the business model will change over the long term as distribution in these markets is brought in-house. This will mean a higher degree of control over sales and marketing by Björn Borg, but at the same time an increase in tied-up capital.