Revolution race storming ahead in 40+ markets
The Swedish Fashion direct-to-consumer outdoor clothing business Revolution Race has continued its strong growth in the challenging market.
The growth highlights the diverse nature of this relatively small company. Even though the company was set up only ten years ago in Sweden, more than 70% of revenues come from outside the Nordic region.
The market environment, especially in the Nordics, remains challenging. Retailers are still saddled with high inventory levels (that are declining), and this has led to deep discounting.
Strong revenue growth with even stronger profitability growth
Revolution Race CEO Paul Fischbein stated that the company tries to refrain from discounting too much. The Gross margins of the company did improve from 71,4% to 72,2%. The improved margins also led to a 34,5% increase in EBIT.
”we have the vast majority of our sales taking place outside the Nordic markets. So we are not that impacted of that situation (discounting) in our total numbers I would say.” CEO, Paul Fischbein
“We have the vast majority of our sales taking place outside the Nordic markets. So we are not that impacted of that situation (discounting) in our total numbers I would say.”
Of the different geographical segments of the company, the Rest of the world grew fastest, by +39%. Also, the German-speaking DACH region, most significant for the company, grew robustly with +24% growth.
The interesting part of the quarter was that the Nordic segment, which had struggled to grow for a few quarters, returned to a solid +16% growth. One has to bear in mind that the currency fluctuations outside the Nordics also play a part, as the Swedish Krona has been declining in value.
The US was pointed out with especially strong growth in the rest of the world segment.
“It’s still small numbers, not impacting that region too much, but growth-wise it looks very promising. And we have seen 3-digit growth numbers up until now, but we expect it to come down a little bit.”
