Rapala growth falters in ‘disrupted’ and challenging market
Rapala VMC’s impressive recent growth faltered in the first half of this year, with net sales of €148.4m (7%) down from last year’s €159.6m. With comparable exchange rates, sales were 12% down.
Comparable operating profit for the six months was €15.5m, down from €26.5m the previous year, a 42% drop.
Rapala’s inventory grew to €117.7m by the end of June which was €31.5m higher than in December 2021.
The Finnish company described the market as ‘disrupted’ but insisted that strong implementation of its ‘ONE RAPALA VMC’ turnaround plan will continue.
“The first six months of 2022 have been challenging in how quickly the sportfishing market sentiment changed from one that was gradually re-setting, due to consumers returning to more normal pre-pandemic activities, into that of a sharper market reset,” said President and CEO Nicholas Cederström Warchalowski.
“The most noticeable and fastest market shift was in the US, as dampened consumer demand there was coupled with retailer de-stocking effects.
“The colder than usual and prolonged winter shortened the open water sportfishing season by a gruesome four to eight weeks in the first half of 2022, depending on country, in the northern hemisphere. Also, the strong macroeconomic headwinds with high inflation, record gas prices together and the effects caused by the Ukrainian war were contributory factors.
“A big thank you to all Rapala VMC team members who again quickly hooked arms to navigate through these difficult circumstances and for not slowing down the pace of our on-going ONE RAPALA VMC strategy. Instead, and importantly, several strategic executional plans were accelerated to meet the new, more challenging market conditions.”
Highlights in the first half of this year included the launch of Okuma in Europe, which Warchalowksi said is ahead of target despite a dampening in consumer demand, and retailer restocking of entry levels rod and reel combos.
Also the integration of 13 Fishing and the US brand’s product development plans had progressed well. Incremental growth from the rod and reel category is fundamental as it is replacing lost sales following the split with Shimano.