How Fjällräven aims to become younger and more urban

The three-day 'Fjällräven Classic Germany' trek brought 325 participants from 34 nations to the Allgäu region in southern Germany earlier this month. Alongside recreational hikers and specialist retailers, representatives of the Swedish outdoor specialist were also on site. Like the retailer Globetrotter and the footwear brand Hanwag, Fjällräven belongs to Fenix Outdoor International AG.

Along gravel paths, past cows and goats and on to a picturesque waterfall, FashionUnited accompanied Dean Polic, managing director Germany at Fjällräven. Along the way, he talked about change in the outdoor industry, the brand's move to open up to a younger, urban audience and why Fjällräven is aligning its distribution more closely with retail partners and target groups.

You have been responsible for the German market since 2019 and bring extensive experience from the outdoor sector. What is your personal connection to it?

After studying sports science, I gained my first experience of the sporting goods industry at Adidas and then moved into marketing at Mammut, driven by my own passion. There I was heavily involved in events and retailer training and went climbing and mountaineering with retailers and consumers. That is still a major asset in my job today. Privately, I still spend a lot of time outdoors with my family in the Allgäu.

What, in your view, defines the outdoor industry?

In my opinion, the industry is still very authentic. Anyone buying equipment quickly notices which brands are genuinely credible and which are less so. We're all outdoor enthusiasts too, some more than others. We're also seeing far more people coming to us from the fashion industry. But many of them don't bring this cultural shift with them. You can have the biggest toolbox in the world, but if you can't get through the door or don't find a connection, you can't put those tools to use.

At many brands, investors now call the shots. Do customers notice?

In the end, customers notice. Is it all just staged marketing? Does the product deliver on its promise? What are aftersales and service like? People can sense that. That's why we put a lot of effort into grassroots work. We couldn't even afford a big TV campaign, because we are privately owned. We are still in the hands of the founding family, in the second generation and close to the third.

What does that mean for your decisions?

All our decisions are genuinely made with the long term in mind, even if another route might be more successful in the short term. A deal can help the annual result in the short term but really hurt in the long term, because important partners make you feel it. And if we have a quality issue, we don't release the product anyway. We would rather discontinue it and take the flak from retailers.

The outdoor look is increasingly making its way onto the street, and many people know Fjällräven mainly through the Kånken. What role does lifestyle play for you?

First and foremost, it's about people who regularly spend time outdoors. They identify with it and want to show that in their everyday lives too. So why not offer clothing for that as well? The movement has also evolved. Today, with a younger generation, we have the modern adventurer, who is no longer the techie with dirt under their fingernails. They want to get outside, but not look as if they're heading on a mission to Mars. They want their own style. Even so, the products still have to meet a certain functional standard.

What role does the brand's heritage play in this?

The street is looking for exactly this heritage, the credibility of brands that have brought a genuine DNA with them for many years. We have been on the market for more than 60 years with highly outdoor-relevant products. With the Kånken, we also served a market that still hasn't realised that Fjällräven is the brand, not the Kånken. But with many people, we managed to build a bridge, and they found their way into the wider collection through the Kånken. Now we need to achieve that on a broader scale, without losing our heritage and DNA.

Is there a dedicated team focusing specifically on this more lifestyle-oriented audience?

Yes, we have reorganised and set up business units. This goes beyond product development, with communications and marketing attached as well. There are two units, Everyday Outdoor and Performance Outdoor, with different teams and different remits. They are all people with an outdoor background, although the Everyday Outdoor team also brings a lot of expertise from the lifestyle sector and has already worked with lifestyle-oriented retailers.

What role do your different retail partners play in this?

Our retail partners address different target groups, and each has its own strengths. Outdoor specialists play a central role for us when it comes to reaching consumers with high expectations of functionality, advice and outdoor expertise. At the same time, we want to open Fjällräven up more to consumers who value our outdoor DNA and heritage but tend to wear the products in an urban, everyday context. For that, we need selected lifestyle-oriented specialists and correspondingly curated assortments. So the point is not to withhold certain products from a channel, but to align assortments more closely with the target group and positioning of each retail partner. In terms of price, though, Everyday Outdoor will never be super cheap.

How big is the price difference between the two units?

Today it's not yet all that pronounced. At Performance Outdoor, trousers start at 240 euros. The jacket costs 750 euros, and the backpack is around 400 euros. In the Everyday range, trousers are around 150 euros, the rain jacket will hopefully be 350 euros at some point, and the sweater 120 euros. Anyone who comes into contact with our products during or after their studies also needs to be able to afford them. These items don't meet the same functional standard. But they are still water-repellent, breathable and of high quality, with detailed solutions that show someone has really thought things through.

How big is the lifestyle-oriented segment?

Classic lifestyle-oriented specialist retail is still extremely small for us. It accounts for a low single-digit percentage share, with a manageable number of partners. They also still find it difficult to work with our brand, because lifestyle specialists need capsules, a curated assortment. We don't yet have this tier-one collection. We are in the process of developing it through the business units. We are now also developing products specifically for these partners.

Has there been an attempt at this before?

Yes, with Samlaren. Around the time of Covid-19, we created a collection from leftover fabrics that we wanted to distribute very selectively. It didn't work, because there was no follow-up assortment. Nobody is prepared to take on a curated assortment as a one-off. Anyone who makes space for Fjällräven needs to know that more will follow.

Samlaren was very well received, partly because the collection was marketed through Vogue. We used many horizontal media that address exactly these target groups, and we were represented in these stores across Europe. What we learned from it is that a curated assortment has to be thought through for the long term and developed consistently, both in terms of distribution and with a continuous product story.

Are there products that go down particularly well with these retailers?

Our Vardag line is doing well. Thanks to its somewhat wider silhouettes, its comfort and its less technical look, it works very well with a target group that is more everyday- and lifestyle-oriented.

So with a streetwear component as well?

Of course. The pieces are cut wider, more comfortable and rather muted in tone. And where they are functional, it is through details you don't see, such as drawcords at the leg openings and waistband. Or G-1000 fabric, which can be waxed to repel water but still has that vintage look. We now also have oversized T-shirts in heavier cotton with corresponding prints. It's taking time, but we're moving in that direction.

You further developed distribution in Germany after you started in 2019. What did that involve?

When I took over responsibility for Germany seven years ago, the task was to further develop our sales strategy against the backdrop of a changing market. At that time, not least thanks to the huge success of the Kånken, Fjällräven had achieved very broad distribution. The Kånken had opened up new target groups far beyond classic specialist outdoor retail and given the brand enormous visibility.

Building on that, we began, even before Covid-19, to differentiate our distribution more strongly again and align it more specifically with the respective retail partners, target groups and assortments. That was a bold move, because it meant taking a great deal of volume out of the German market. But the strategy convinced management and the owning family. It was a five-year plan, and we fulfilled it. We are now building on that qualitatively with segmentation and selective distribution across Europe.

To what extent is distribution still managed at a national level?

We haven't had a purely German market for a long time. Foreign players are active in Germany, and German retailers are active abroad. That's why we have a European sales strategy with uniform distribution guidelines. We are segmenting our distribution more strongly according to different consumer needs and retailer profiles, because we don't only address outdoor customers, but also hunting, bags and general sports retailers. To avoid over-distribution and oversupply, we need to be more selective. We are starting on that now.

That also takes the courage to take volume out of the market, so that it can recover somewhat with our products.

How are the individual segments weighted?

Outdoor is of course our biggest area. By far the largest share, around two-thirds, comes from outdoor specialists. Hunting, bags and general sports retailers make up the rest. General sports retailers are another important distribution channel for us. They reach a broader, sports-minded target group and therefore fulfil a different function from specialist outdoor retailers, which are positioned more on assortment depth, advice and outdoor expertise.

How is the balance between wholesale and direct sales changing?

We are of course adapting to changes in the market. Many small and medium-sized retailers in particular are struggling, either because of a lack of liquidity or unresolved succession, and probably often because of both. If liquidity is lacking, so is the money to invest in their own business model. At some point, those models become outdated and no longer reach the target group.

We were very wholesale-heavy and still are. Wholesale remains one of our most important pillars. But we can't rely on it exclusively, not least because retailers are increasingly focusing on the brands that perform well for them. There is also a target group that wants to engage with the brand directly. That's why we have steadily expanded our e-commerce share, including in Germany. We want to develop our direct-to-consumer (D2C) share, which currently stands at no more than ten percent, in a targeted way, without calling into question the central importance of our wholesale partners. And next year we will open a store in Berlin's Mitte district.

A standalone store?

It's a joint retail concept with Globetrotter. Fjällräven will present its brand and collection independently there while benefiting from the partner's outdoor expertise.

Is this a strategy you plan to roll out further?

We are not currently pursuing a nationwide rollout of our own stores. Instead, we are focusing on selected locations where a dedicated brand presence makes strategic and economic sense. Berlin is important to us because we have fairly high awareness and relatively high desirability there. In Berlin-Mitte, around the historic Hackesche Höfe courtyards, we serve a specific target group and design our presence differently. The store will be much more lifestyle-oriented; it won't be a techie shop. For us, it's a huge opportunity to reach a wider audience, including many tourists. Many brands expanding strongly in Asia are currently opening stores at tourist locations in Europe in order to carry their image back to Asia. That's not something we want to afford. If stores can't operate profitably, it makes no sense for us.

Why is Berlin such a strong market for you?

I think Berlin has many residents who behave more consciously and think more about their consumption. The share of alternative scenes is also higher. And those are exactly the people who appreciate what we do. We are perceived as a very sustainable brand, even though we have always marketed ourselves as a brand with long-lasting products.

What about the rest of Germany?

Many Berliners, and people in north-eastern Germany in general, have a strong connection to Scandinavia. We see this north-south divide in our brand awareness too. In the north and east, people know us much better than in the south, because they are more likely to holiday in Scandinavia. People from Bavaria and Baden-Württemberg tend to head to Austria, Switzerland, Italy and southern Europe.

And what role do marketplaces play?

We don't currently manage them actively ourselves; they are used by retailers via their seller programmes. We need to channel that much more strongly, because the presentation is sometimes completely inconsistent, with incomplete images and product texts. In the end, customers perceive the brand.

In the outdoor sector, e-commerce means losing face-to-face advice. How do you deal with that?

That's definitely where we need to develop further. Customer service is one of our strategic priorities, starting with our own website. Customers should find much more information there, from videos and user guides to recommendations. How do I pack my backpack properly? What actually belongs in it on a multi-day trek? We also need to be reachable by phone, email or chat. We also train our retail partners' sales advisers and want to help improve the quality of advice in bricks-and-mortar retail again. Repair is part of it too. The products we develop today are designed so that you can replace simple things like a zip or a button placket yourself.

How is business in Germany currently developing?

Our results have been stable in recent years. They're not exactly going up, but we're not losing ground either, despite all the changes in the retail landscape. We have fewer retail accounts, but we're doing more business with that smaller number than before. We are focusing, and as a result the level of service for each account has improved. At the height of the Kånken hype, results were of course a little better. But because we are active in more than 60 countries, that balances out to some extent. Business in Asia is picking up.

How important is Germany within the group?

For Fjällräven, Germany is one of the most important and largest markets worldwide, and in Europe it is the largest, ahead even of the home market Sweden, owing of course to the size of the market. Next year we will have been in Germany for 50 years. For us, it is a mature market that we no longer need to build but to develop qualitatively. And we believe our investments will help us recover the growth we haven't seen in recent years.

Which investments are those?

We have invested heavily in a new merchandise management system and in IT. On top of that, there is our own logistics operation, which is being further automated. We are also investing in our own production capacity, including through a stake in a production site in Bulgaria. And we have fully acquired Devold to benefit from its expertise. The brand fits very well with our portfolio and in terms of DNA too: Scandinavian, very well established and considerably older than Fjällräven.

How do you see the future, given the difficult economic climate?

As soon as the economy recovers, we will be well positioned. We're not jumping for joy right now, but we're not nervous either. I would say we are among the five leading brands in Germany, with an assortment that doesn't really compete with any other brand, except perhaps Patagonia in terms of attitude, lifestyle and target group.

What revenue growth have you set as your target?

I would describe it differently. Going forward, we no longer have a purely German market and increasingly look at the European market across national borders. But the goal is clearly to regain momentum. For the lifestyle range, there is a target for 2030. We want to expand it massively and increase revenue there significantly, by a double-digit percentage. That doesn't mean the result will rise to the same extent; there will be a shift. But growth is of course planned, at sensible growth rates.

What role do the individual countries play in this European approach?

There will still be country organisations. But there are markets such as Germany, Switzerland, Austria, northern Italy and perhaps parts of Eastern Europe such as Slovenia where purchasing behaviour isn't so far apart. Demand is similar, and so are the weather conditions. There, we need to work more on the assortment, because we are Scandinavian in orientation. We need to move more into lighter products and not only the extremely robust and warm ones. For example, we have down jackets that people hardly wear in Germany because they are so warm, but which are iconic items in Scandinavia.

Which markets follow Germany?

For Fjällräven, that is of course the Scandinavian market, above all Sweden. The home market is absolutely dominated by Fjällräven. Benelux is similarly strong, followed by Denmark, where Fjällräven is number one, even though it is a much smaller market. Then come the UK and the emerging markets. Switzerland and Austria also account for a solid share of revenue. Incidentally, the country organisations serve all brands of the Fenix group, in which Fjällräven is the strongest brand. The Austrian organisation handles Fjällräven, but also Devold and Hanwag. My team and I are responsible exclusively for Fjällräven, because the market is so large. That's why it was decided early on that the German company would be a dedicated Fjällräven entity.

FashionUnited was invited to the 'Classic' event in Allgäu by Fjällräven.