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Rapala President Reports Difficult Sales in First Six Months of 2020
The new President and CEO of Rapala VMC Corporation, Nicolas Warchalowski, delivered his first trading update to investors this week, describing the first six months of 2020 as ‘truly exceptional’.
He announced a net sales decrease of 17% from the previous year to €117m as the COVID-19 pandemic took its toll on all areas of the business, particularly North America and the Nordic region.
He said: “Our distribution centres in North America were closed for more than a month due to government lockdown measures. Furthermore, mild winter weather strongly impacted the winter sports business and our exit from certain third party distribution agreements decreased sales in the Nordic region.”
Warchalowski, who joined Rapala earlier this year following the resignation of Jussi Ristimaki last year, added that fishing gained in popularity during the pandemic, and after significant negative impact on its sales, the group witnessed increased demand for its products from the end of May onwards and recorded double digit growth in sales.
“In addition, our investments in direct e-commerce business are also yielding results,” he said. “European e-commerce for the first six months doubled compared to the same period last year and the same was the case in the US despite the closure of our warehouses.”
Warchalowski said that Rapala reacted quickly to the pandemic in March and implemented a strong COVID-19 mitigation plan which included safeguarding the health and safety of its team members worldwide and protecting the financial position of the group.
“We carried out a rapid and forceful ramp-down with a fast reduction in operating expenses, a cut in purchases and the implementation of a watchtower to monitor cash flow and account receivables.”
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