XXL struggles with growth & profitability

Sports and outdoor retailing has seen a difficult year. The performance of XXL highlights these challenges. The company has seen revenues decline in 2022 in every country. Finland's Sports and outdoor equipment retail market grew little during 2022.

The same revenue slowdown was evident for Intersport Finland, the main rival for XXL in Finland. Interport saw revenues decline by -4,3%, which is a much better performance than the -18% for XXL. At the same time, the overall market was nearly flat.

It will be interesting to see whether the third Sports and outdoor specialist Stadium has been taking a share of the market or whether general merchandise players such as Tokmanni and Motonet or hypermarkets Prisma and Citymarket have been more successful.

XXL is declining heavily and exiting Austria

At the same time as XXL Finland has been losing market share, it has been one of the best-performing markets for XXL. Or should one say one is the least poorly performing? The declines in Sweden and even in Norway have been more significant.

As the sales have declined during 2022, the inventory values relative to sales have started to increase. The increasing inventories have forced XXL to resort to increasing promotions to clear the excess inventory. The inventory clearance, in turn, has led to a significant gross margin decline. The margin for the all-important Christmas was 40% in 2021. Last year the margin plummeted to below 20%.

The struggles have led XXL to announce that the company will exit the Austrian market.