Bear Grylls Knife Maker Fiskars Targets Expansion Into AsiaKati Pohjanpalo
Fiskars Oyj, the Finnish maker of Gerber knives, plans to expand in Asia with acquisitions and growth of existing brands while it rides out Europe’s recession, Chief Executive Officer Kari Kauniskangas said.
“Acquisitions are clearly a part of our growth toolkit, and our balance sheet makes them possible,” Kauniskangas said in an interview at the company’s headquarters in Helsinki yesterday. “We now have a structure into which we can incorporate companies we acquire.”
Fiskars, with brand such as Iittala porcelain, Fiskars garden hand tools and Bear Grylls-branded Gerber survival gear, wants to change its revenue stream, now about 70 percent European and 30 percent U.S., to bring in more Asian sales. It’s transformed itself from a holding company and now actively manages brands. Sales have grown 16 percent to 748 million euros ($974 million) since 2007 and the company sees organic growth underpinning expansion, Kauniskangas said.
“We want to keep the U.S. strong, and we’ve focused the past few years in building our European presence and now we’ll gradually need to move toward Asia,” Kauniskangas said. “We have shops in Japan and China and our goods are sold in Taiwan and Korea. We know our goods and brands resonate with consumers in these markets.”
“Organic growth has been our priority and focus,” he said. “We have to be able to manage what we have -- that’s why we’ve made big changes. Gradually we’re reaching the point where we’re able to start looking into acquisitions.”
In December, Fiskars bought Royal Copenhagen, the Danish maker of hand-painted porcelain, integrating the company into its organization this year. Fiskars also improved its profitability in 2012, raising the proportion of operating income to revenue to 8.6 percent from 7.1 percent.
The company has more than 100 shops and shop-in-shops globally, and it opened an online store for Iittala porcelain and glassware in Europe last year. Wal-Mart Stores Inc., Staples Inc., Amazon.com Inc., Home Depot Inc. and Canadian Tire Corp. are among Fiskars retailers in North America.
The best acquisition targets would be companies with a “similar operating model and philosophy with operating margin and cost levels comparable to our own,” Kauniskangas said.
“It is important for us and the company we might acquire to operate within the distribution channels we are currently using,” he said. “We need to be even stronger and better at serving our existing customers.”
Fiskars shares rose 0.3 percent to 16.95 euros at 11:37 a.m. in the Finnish capital, ending three days of losses and giving the company a market value of 1.4 billion euros. Trading volume was 11 percent of the three-month daily average.
Fiskars, which traces its roots from iron works founded in 1649 at its namesake town in southwestern Finland, will ride out the recession riling the euro area, Kauniskangas said.
“Consumers are able and willing to spend money on the goods we make, affordable luxury,” he said. “Even if the world appears gray, people will seek to brighten their lives with something small, and we’re well-positioned for that.”