Rapala VMC Corporation has emerged from 20 months of change in ‘good shape’
Is there a major fishing tackle company the world right now that is undergoing more change than Rapala? It’s unlikely.
One of the industry’s most revered brands has packed more into the last 20 months than most businesses experience in their lifetime.
It was in July 2019 that Rapala VMC Corporation announced the purchase of a 49% stake in 13 Fishing, the fast-growing Florida tackle company.
The Finnish business then changed leaders when Nicolas Warchalowski (left) took what appeared to be a radical step from fashion to fishing to replace former CEO Jussi Ristimaki in March 2020, his appointment coinciding ominously with the full onset of COVID-19.
Already preoccupied with rebuilding its distribution network after announcing the end of it 26-year distribution agreement with Shimano, Rapala then confirmed that it was closing its ‘new’ distribution facility in Indonesia after just ten years, which largely contributed to a reduction in personnel from 2,304 in December 2019 to 1,971 at the same time in 2020.
More recently the company has implemented a number of senior personnel changes in both Europe and the US. And then only two weeks ago, Rapala announced that it had acquired the Okuma rod and reel business in Europe to add to its flagship brands.
However, considering the huge disruptions to the market and the sizeable internal restructuring, the company appears to have emerged in good shape.
Rapala’s full year accounts for 2020, released today and reported on this site earlier this morning, reveal that comparable operating profit grew from last year.
The figures are buoyed by a strong second half in which net sales and comparable operating profit showed meaty increases, despite higher comparable exchange rates. A record low year-end inventory value was driven by tight stock control and centralised purchase quota allocations. Cash flow from operations was also at a record level.
Looking ahead, there seems a fresh certainty and optimism about Rapala’s strategic goal to become “a global fishing tackle powerhouse” and ultimately the “world’s largest fishing tackle company” by releasing the growth potential within the company and improving group profitability.
The strategy is based on five interconnected building blocks explained the Board’s end-of-year report:
Company culture – a united, collaborative, dynamic and growth oriented approach. The group has restructured its central marketing and product development functions and put in place a new management structure to enhance decision-making power and improve day-to-day management.
Consumer focus – to lead the market with the newest trends by offering exciting products, along with a centralised marketing function well connected with the growing digitally aware consumer base. DTC (Direct to Consumer) sales via digital channels achieved double-digit growth in 2020.
Customer relationships – establish wining positions in local markets with deep customer and market knowledge and investment in all sales channels. Several organisational and management changes have already been made to increase customer focus.
Operations and finance – continued investment to make step-changes in operational excellence, and to improve working capital efficiency and profitability. Targeted cost savings to date relate mainly to the European business and the Asian lure manufacturing operation.
Product development – new appointments are already in place to speed up the process. Due to COVID, a number of tackle shows were cancelled, including EFTTEX. However, this didn’t have a significant impact on new product launches which were carried out on schedule and as planned. Key new products included the X-Rap Haku in Europe, the Storm V-Slab 08 in the Nordic markets, the CountDown Elite in Japan and Asia and the Rap-V Blade in North America.
“Focus and speed are at the centre of the strategic decision-making process in order to enable us to be more agile in a competitive landscape,” says the Board in its full-year accounts release.
The report is infused with a sense of optimism, of a company that has crossed some rickety bridges, has its feet on firmer ground and knows the path it plans to take. There is sense of the whole business being reimagined and reconstructed in a way that will take it closer to distributors, retailers and consumers.
At the heart of the strategy is a more simplified and centralised operating model driven by a new organisational structure comprised of fewer management layers.
Warchalowski told Angling International in a recent interview that he wants his people to be closer to the market and to customers. He is already making that happen. David Neill is now heading up Global Product Development and Innovation, while Enrico Ravenni is Head of Distribution in APAC. Both are long-term servants of the company. Angling International understands that more personnel changes in Europe and America are under consideration.