Good afternoon, ladies and gentlemen. It is my delight to welcome you all to Marimekko's first ever Capital Markets Day. We're happy that so many of you have decided to join us today, either here at our printing plant at Herttoniemi in Helsinki or online. My name is Anna Tuominen. I'm the IRO of Marimekko.
I'm Essi Weseri, Marimekko's General Counsel, and together with Anna, we'll be your hosts today. Let's first go through our agenda. Our purpose today is to dive into the details of Marimekko's next strategy period from 2023 until 2027, as well as our updated long-term financial targets. We'll start with welcoming words from the Chair of our Board of Directors, Mika Ihamuotila, and then our President and CEO, Tiina Alahuhta-Kasko, will discuss the word of the day, which is, of course, scale. Our leadership will go through their plans and priorities for the strategy period. We'll have a short break in between, and then it's time for our CFO, Elina Anckar, to go through our financial plans in more detail. Tiina will wrap up the presentations, and then it's time for your excellent questions. We'll conclude the day with a Q&A session.
We'll get back to the practicalities of the Q&A session later on. For those of you viewing the event online, you can already use the chat function on the platform to submit your questions during the event.
One thing that is good for you to know, that our Chief Supply Chain & Product Officer, Tina Broman, was not able to attend today, unfortunately. Another thing that is good for you to know is this disclaimer, at least from a lawyer's perspective, good to know. Don't worry, I will not read it out loud. I saw some scared faces here, don't worry. I think it's now time to start. We're super excited to have you here, and hopefully we'll get you excited about Marimekko's new strategy as well. Mika, the floor is yours.
Hi, it's my role is to launch the men's collection. I see that Rebekka and others in the team are not that pleased about it. My name is Mika, and I've been with the company for 15 years. I'm the Chair at the moment, and I've been the largest single shareholder in the company for 15 years. I joined the company as a president and CEO when I started, and I tied my whole wealth into this company. Why? I thought that it had something that virtually no other Nordic company had. A very special heritage, which is something that you can't build just like that. A very special design language with colorful prints that are highly differentiable in the global market. Very special values.
I felt that the values were such that the consumers around the world are going into that direction, not the surface, not showing off or something like that, but something very special. That's why I felt that this was a fantastic opportunity and platform to start building growth and make the company global. We did lots of work, opened 100 stores and so on, and especially with the present management team, I was fortunate and wise enough to appoint Tiina as a CEO, who then gathered a fantastic team around you. After that, it's been a big and fantastic ride, and I've been a free rider. I have a background. I'm a previous CEO of two banks, and I've been chair of a couple of consumer brands and consumer companies. I'm super enthusiastic.
I'm equally passionate and equally kind of committed as I was 15 years ago. Actually, I believe in Marimekko's opportunity right now more than ever before. You're going to meet the management board members during this day, but I will just say a couple of words about our board, the board that I'm leading. I've had the tradition with the board to build it so that I always think together with the CEO that what are the key strategic kind of avenues and opportunities and challenges for us? Then I'm trying to find the best possible board members based on that. As you will see, right now, it's Asia, Japan, China, scaling operations and digitality and so on.
In our board that you're not going to see today is Tomoki Takebayashi, who is one of the senior leaders in LVMH, and he's the CEO of Christian Dior in Tokyo. He's Japanese, but he has his background in the U.S. Then we have Carol Chen, who is the co-CEO of Semir, which is one of the largest Chinese companies. She is originally from Taiwan. These both, they not only bring understanding for us of the Asian market, but as you heard, they both have understanding of building consumer companies, building fashion brands in different parts of the world.
We have Teemu Kangas-Kärki, the previous CFO and Chief Operating Officer in Fiskars, to bring us understanding in scaling operations in IT and so on. He's currently the CFO in Nokian Renkaat. We have Marianne Vikkula, who is head of new markets in Wolt, which is one of the leading food delivery apps and platforms in Europe. She's bringing us understanding of digital issues and also of some new operative models such as potential platform businesses and so on. We are entering a more difficult economic situation, but somehow I have a gut feeling that Marimekko will be one of the winners in this market.
Experience shows and science and research shows that when going gets tough, the consumers approach solid brands who talk solid issues, brands that walk the talk, brands that have a heritage, brands that are authentic, reliable, and close to us. I think this combination of our heritage and the core values of our brand together with the extremely talented and experienced management team who you will meet today is a fantastic platform for us to scale the operations. As Tiina said, and you will see, for the last three years we focused on focus and growth, and it's amazing how the management team together with the employees were able to deliver that. Increase sales and increase the EBIT margin in an exceptional way.
Now it's going to be time for scaling the operation, scaling the brand, and I think this is a great opportunity for this. Super good to see you here and I hope you are as enthusiastic as I am. Welcome once again.
Good afternoon, everyone also on my behalf. We are super excited to talk about scaling up Marimekko today. Before we actually delve into the next period of our strategic cycle of 2023 to 2027, I will in short start by recapping what Marimekko is really all about, and also a brief touch base with our performance in the current strategy period. Where this all started, we were living in the late 1940s, early 1950s Finland. The world looked very gray after the war. People had a lot of functional needs, but there was also like a cultural void that waited to be fulfilled after the more difficult time period. This lady in the picture was called Armi Ratia, and she had a brilliant vision.
She wanted to energize and bring joy back to the Finnish society and to the world after the more difficult time period. Her husband, Viljo, used to own an oil cloth producing factory, and Armi then started to gather around herself this group of young artists and creatives and invited them to create avant-garde prints for her husband's factory. People were admiring the printed fabrics, but didn't really know what to do with them, and therefore, in the springtime in 1951, the couple decided to organize a fashion show in Helsinki just to give people ideas what they could made out of this avant-garde, bold printed fabrics. Ironically, the idea was not to sell, but when people saw the liberating bold designs on the catwalk, it was something that the world hadn't seen before, and they wanted to buy it.
That's when Marimekko, translated in English as Mary's Dress, was started. That really marked the birth of what is said to be one of the world's first real lifestyle brands. Ever since 1951, Marimekko's mission has been to empower people to be happy as they are and bring joy to our everyday lives through our bold prints and colors. This is the mission that we follow today, and actually, as Mikko was discussing earlier on in your presentation, we feel that today this mission is probably even more meaningful than ever given the kind of uncertain and volatile environment in the world that we're in. Since the beginning, the bold prints and colors have formed our unique DNA and our differentiating factor.
It is this world-renowned and recognizable art of printmaking that has formed from Marimekko walking between the boundaries of art, design, fashion, and architecture that really sets us apart from everybody else out there in the world. Today, we have an archive of over 3,500 prints. This is of course a number that keeps on increasing as our younger generation of designers create new iconic classics every season, every year. What we're also amazingly proud about is our printing factory here where we are today in Helsinki, where we actually print today around a million meters of fabric every year to cater for all of our different product lines.
Not only is this a production facility, but equally important its role is as a creative hub, which also allows us to participate in R&D initiatives that take our industry towards a more sustainable future. Who are then our customers? We are a very, very expressive brand, so of course our target customers are also people who are not afraid to show their own personality through the way that they dress themselves or their homes. They are empowered and open-hearted urban explorers, conscious consumers who really understand and embrace their own responsibility over their consumption choices. These are people who march to their own beat in life, living life that looks like them. The Marimekko lifestyle today is formed from three product lines, fashion, bags and accessories, and home.
Not only do they offer a unique lifestyle experience for our customers, from a business point of view, they also enable us to balance seasonal differences and cyclicality, as we were able to evidence in a very extreme way also during the pandemic. Today, our key markets are Northern Europe, the Asia Pacific region, and North America. Our online store serves already in 35 countries. We have around 150 Marimekko stores and shop-in-shops in our key markets. All in all, Marimekko products are sold in around 40 countries, so a very global marketplace. When we look at our current strategy period, our focus on growth period, where we have been concentrating on seeking markedly stronger profitable growth than before by speaking to a wider, broader global target audience. How have we done?
We have achieved a proven track record in marrying together our strong differentiating artistic vision with improved commerciality. We have been working intensively in the last years to modernize our brand and collections to appeal to a wider audience. For a brand to have strong roots and history, it's an amazing, huge asset that customers around the world appreciate. Simultaneously, in order for us to ensure an even more flourishing future, we need to always ensure that our brand is translated in a relevant, timeless way to speak to our customers today and tomorrow. Therefore, what we have done in the past years, we have been building the coherence of our lifestyle collections. We have been building the combinability, the mixability, and matchability of the items within our collections.
We have been updating the versatility of our materials to address also different needs in different parts of the world with different climates, and we have been taking to the next level attention to different kinds of detailing. At the same time, we have been also launching new product segments, for example, the Marimekko Kioski, which is a very exciting genderless streetwear line featuring our most iconic prints. That has proven to be a great tool, not only for us to speak to also the younger target audience, but also to build our awareness in the markets internationally where we aim to grow. Secondly, we have been accelerating our digital business to grow our reach and omnichannel sales.
I have to say that our long-term investments that we have been putting for many years already have been one of the key success factors for us in the last years and also in us navigating the extreme circumstances of the coronavirus pandemic in a very successful way. When the stores of the Marimekko physical stores were temporarily closed due to the pandemic in the peak years, we were successfully able to transfer all of our campaigns online, and this way actually mitigate a significant portion of our sales purely from the online channels. Marimekko is a brand that speaks to people across generations, and this is a huge asset. Therefore, to again ensure the longevity of our brand story, we have also been focusing on speaking to the next generation of our customers.
I think this is already very visible when we look at also the everyday life, maybe here in Finland or some of our other bigger markets. We have been also strengthening our key city ecosystems to maximize our sales, and a great example of this is, for example, the super-fast pacing with which we rolled out new Marimekko online stores in many of the Asian partner markets during the course of the last couple of years, which has further rounded out the omnichannel ecosystems in some of those key markets of ours. Finally, something that probably many of us are already very aware of, we have been conducting very highly visible top-level global brand collaborations to increase our international awareness.
These are, of course, extremely important for us to be able to introduce our brand to a very wide international target audience, and this way, actually, they support in an excellent manner our core growth story. This long-term work has translated into strong performance throughout our current strategy period, with 2021 being a record year, exceeding our previous long-term financial goals. When we look at our net sales development during the course of the last five years, from 2017 onwards, we have achieved a CAGR of 10%, while at the same time we have been improving our comparable operating profit with a CAGR of 38%. This is the operational leverage that we've been able to already gain within the last five years.
We also reached our record-level profitability with 20.5% comparable operating profit margin last year, which was altogether a record year, as said. If we look at the brand sales development, and brand sales is an excellent indicator of the reach of the Marimekko brand, as it translates the sales of all Marimekko products into retail sales. There, actually, our CAGR has been close to 20%, and actually, it has been 20% in terms of international brand sales during the last five years. I think this really kind of showcases the expanded global presence and growing interest of Marimekko around the world. Over 65% of our brand sales already come from outside of Finland, so this really kind of underlines the business model impact.
This strong performance has then and the continuous profitable growth has then paired with our strong financial position enabled stable dividend payouts in the last five years. As you can see here in the chart that actually our dividend payouts have been exceeding quite substantially in many years our long-term financial goal of paying a yearly dividend with the percentage of earnings per share allocated to dividends being at least 50%. We have been also going well below our net debt to EBITDA at the year end maximum of two target when we look at the performance in the last years.
I have to say that this very strong performance, of course, would not be possible without the fantastic contribution of all the Marimekko employees, our partners, and of course we are very grateful for the support of all our customers around the world. The strong results have also reflected in the market capitalization development of Marimekko, and in the early part of 2020 we also rose to mid-cap. What I think is also very interesting is to look at how Marimekko has done against our industry peers and competition. Here in this chart, we have been actually looking at the sales development between 2021 and 2019, and then on the horizontal axis, the EBIT margin of 2021. Looking at the performance in the pandemic years in the last couple of years.
What we can definitely see here is that despite the coronavirus pandemic being the worst crisis experienced by the fashion industry in decades, a crisis that actually has further polarized our industry into losers and winners, Marimekko has, with our performance, become one of the top players in the industry, really kind of outperforming the general trend. Especially in our relative profitability, we rate very high and just follow the luxury players. What this obviously means for us, this showcases that our strategy works.
Therefore, looking into the future, with this proven recipe for success, the next phase in our journey is all about scaling up our profitable growth, and this way actually fulfilling our mission of empowering people to be happy as they are and bringing joy to their every day lives to an even wider group of people around the world. We see that the mega trends that shape our industry and our consumer behavior support our success story and growth story. If we look at digitalization, globalization, the changes in consumers' values, the growing importance of sustainability, overall the growing importance of DEI issues, we can see that these are all trends and permanent sort of trends that underline and open up the unique growth opportunities for Marimekko.
To capture these unique growth opportunities, together with the Marimekko teams, we have identified five key strategic success factors by concentrating on which we believe that we can execute our new strategy with excellence. These strategic success factors all connect with the word scale. If I just in brief run them through. The first letter S that stands for sustainability. At Marimekko, we believe that determined sustainability efforts support our long-term success. The letter C it refers to the creative vision. Sharpened creative vision to speak to a wider global audience. To be successful in the global marketplace, we need to have a crystal clear value proposition, and we're working to reinforce that even further. The letter A, which equals to Asia.
In our new strategy term, we focus on accelerating our growth, especially in Asia. The word L stands for love for Marimekko life. Cultivating the Marimekko spirit both within the growing global Marimekko customer community, as well as our organization and our personnel, is our top priority as we feel and see that joy at work translates to joy to our customers. Finally, the letter E, which stands for end-to-end digitality to boost our omni-channel growth and efficiency. With these words, in the next moments, I will give the floor to my lovely colleagues who will deep dive into each of these key strategic success factors and elaborate our plans more in detail.
With these words, I would like to invite to the stage Riika, who is in charge of our business development and also sustainability. Riika, please go ahead.
Hi, my name is Riika Wikberg, and I'm Chief Business Development Officer here at Marimekko. As Tiina said, I'm wearing this double hat both for business development and sustainability. I'm really excited to present to you our first key success factor, sustainability, standing for letter S. Sustainability is a significant driver for change within our industry, and we believe at Marimekko that our efforts in sustainability will reinforce our long-term competitiveness and desirability. Let me explain to you next why and especially how. Sustainability and timeless design are deeply rooted into our values. Our design philosophy has always been based on a sustainable approach. This is one of my favorite quotes from Armi Ratia, founder of our company. "Marimekko is not about trendy fashion with a few minor exceptions. We make lasting and timeless products.
Timelessness may, however, ever occasionally come into fashion by chance, like now." Even if this was said more than forty years ago, it feels more and more relevant every day. As said, sustainability is a significant driver for change, and here we have some proof points of change in consumer behavior. Let me actually start with a couple of questions. How many of you have changed your purchasing behavior towards being more sustainable over the past five years or so? How many of you have paid more for something that you have considered being more sustainable? Good. I saw actually the Teslas outside, so this is promising. This development is even more visible within our customer base, and especially among younger consumers. We believe that our investments will reinforce our competitiveness and desirability when we continue to take steps towards becoming more sustainable.
Sustainability is not the hygiene factor anymore. We also believe that it's good business at the same time. What we mean by this is that more and more consumers are becoming more and more conscious of what they buy, especially the younger ones, and this will only increase. If we wouldn't take these steps, we would actually risking not being among the brands which are being considered even. Even if this slide is focusing only on consumers, sustainability is really important value for all our stakeholders, also for you, and also when we are attracting and retaining talent. This picture nicely summarizes our sustainability strategy that we launched almost two years ago, which was actually a very solid continuation for the long-term sustainability work that we have been doing for decades actually.
It covers the whole value chain, starting from design and raw material selection, then moving on to the printing, to the logistics, to the omni-channel retail, where we are focusing especially on transparency during this strategy period. The use phase, where the consumers are wearing and washing the items, then possibly selling it on a second-hand market, for example, in Pre-loved. I'll get back to that. Ultimately closing the loop and recycling the fabric and making new fabrics and new products out of it. Our sustainability vision and work is based on these three guiding principles. Timeless design, leaving no trace, and fairness and equality. Let me next walk you through each of these. The first principle, timeless design, brings joy for generations to come. This is part of our DNA, has been since the very beginning.
I think that the true manifestation of our sustainability thinking is actually the dress that I'm wearing. It's a vintage piece from early 1960s. It's almost incredible to imagine that it is 60 years old already. I think that it very nicely demonstrates the efforts that we, even today, put on durability and how high quality standards we set on our products. We are here today in this unique printing factory in Herttoniemi, in Helsinki. Not everybody perhaps know that we have also our material test lab in the upstairs, actually behind you. Last year alone, they made more than 4,000 different tests on hundreds of different materials to make sure that the colors don't wear off, the fabrics don't start to peel, and et cetera. The most sustainable product is the one that you use over and over again.
By choosing more sustainable materials, you can only go to a certain extent. Don't take me wrong, we are also focusing on putting a lot of effort on that one as well. What is even more important and impactful is that how many times you wear the product. That's why we are actually working on multiple ways to prolong the life cycle of our product. This leads us to one of my favorite initiatives, so Marimekko Pre-loved. This is a second-hand marketplace that we launched very recently, only a few weeks ago. It is both for consumers and for vintage stores to sell their old Marimekko pieces. That's exactly how I found this piece as well. What we do is that we offer the marketplace, and then the buyer, excuse me, the seller takes care of the rest.
First listing the product, taking the pictures, and then handling the logistics. Really the core idea is to get old Marimekko pieces back in use. Of course, when selling the old piece, the seller might often buy a new Marimekko item as well, and the buyer actually as well. This really nicely is driving more engagement and traffic into our site. As I said, we launched it only three weeks ago, so it's super early to say anything, but so far it looks very promising. Over the first few weeks, we have had more than 60,000 people visiting the site, and a good share of them have been completely new Marimekko customers. Exactly as we hoped for, this will attract new wider audience with a little bit more accessible price points and offer a very nice entry into the brand.
This really works. This is a win-win-win-win, both for Marimekko, for the buyer, and for the seller, and for the environment. The second principle, products of tomorrow leave no trace. This is actually very ambitious one, and here we have a lot of work to be done in order to get to the point where our products are being made in line with the principles of circular economy. We have been working on this a long time already, decades, like I mentioned, and we have a lot of initiatives going within the company across the functions. We have set three key targets for ourselves. First one is about reducing greenhouse gas emissions in our own operations -40%, then -20% in textiles, and then -50% in upstream logistics, which refers to the logistics paid by us.
If we go through this shortly. First one, our own operations. This is referring, for example, to this printing factory, also the headquarters and the stores. This actually represents very small share of the total emissions that we are responsible for. However, it is important to master this as well. Also, because we want to set an example, and also because these are the ones that we can directly impact. We have done a lot. This printing factory, for example, runs on biogas, which is practically completely emission-free energy source. We have solar panels on the roof, and we are heating this whole building with the renewable district heating. The second one, textile materials. This is very important one because this represents 38% of all the emissions that we are responsible for.
We have been working in cross-functional teams to set a solid material strategy for ourselves, which will guide us and guide our transition towards being more organic and using more and more recycled fabrics. This is, of course, gonna take a little bit time because we need to test everything, and we are never gonna make any compromises on our quality standards. The third one, logistics, -50%. It sounds ambitious, and it is very ambitious, but we are progressing here actually really well as well. The means are very simple in the end. Choosing less emission-intensive transportation modes and optimizing our routes. The nice thing here is that actions here typically go hand in hand with our costs. I mean that often we are able to save both environment and in our costs at the same time.
One concrete way to achieve the previous targets that we just covered is to continue promoting innovation. Putting our efforts into new technologies, new materials, and new business models. This unique printing factory gives us this unique possibility to join these amazing collaboration possibilities that we have. Here we have collected few examples of the collaborations that we have recently announced. We have been working with Spinnova quite some time already, and few weeks ago, we actually published our first commercially available collections for the consumers. These are actually first Spinnova products or products where we have some Spinnova fiber in with the print on them as well. In our latest fashion collection, we have three different plant-based dyeing solutions in use. We are working on different bio-based materials, and also we are taking first early steps towards circular economy to close that loop.
We are here in this factory, we are collecting the waste fabric, and together with our partner, we are processing that with the aim to produce new fabric one day. More information to come of that one later on. This innovation agenda really gives us a nice head start, and it's also super meaningful work for everybody working at Marimekko. With these concrete targets and actions in mind, I'm really happy to share that we, as a company, we have committed to Science Based Targets initiative. Thank you. Yeah, we are really happy about this. Sustainability is a journey. Like I mentioned, we published our previous strategy and the targets only two years ago, but already now we were ready to take a step further ahead.
What this will really mean is that we're gonna, well, firstly, extend the targets that we just covered. They were all due by the end of 2025, but this will stretch even further. Most importantly, this will be even slightly more ambitious and holistic targets than the previous ones. As always, as Marimekko, we have already, at this stage, made a solid modeling that how we will get there, what are the actions that we need to take in order to reach our targets. The last principle, positive change, through fairness and equality. This is a value which has been very important for us since the very beginning, and we want to make sure that our entire value chain is built on these principles.
Our own values set the foundation to build on, but what is actually also really critical is the supplier assessment and the selection. When we are starting to work with somebody, it typically takes up to two years. Within our industry, our supply chains are long and complex, and on a global scale, we are still a small player. That's why it is really important that we collaborate and work together with other companies and parties. That's why we are, for example, members in amfori BSCI, which is a auditing network where we can jointly drive this agenda forward.
I mentioned the transparency when we were talking about our sustainability strategy, and really the aim is to provide more and more information for consumers so that they can also clearly see that where the products are coming from and what's the source of the raw materials, ultimately aiming to full transparency. First, a short recap. What I would like you to take with you from this presentation. Sustainability is good business. We believe in this, and we truly believe that our efforts in sustainability will enforce our long-term competitiveness and desirability. Thank you so much.
I would have a couple of questions for you, if I may.
Absolutely.
I'm sure all the investors and analysts in the room and online are interested in knowing what kind of investments will be needed for our sustainability journey.
We are starting with this easy question right in the beginning. Yes. Well, first I want to mention that we believe that these investments that we are making will reinforce our competitiveness and desirability and be critical for our future success. Tiina walked you through and mentioned already how successfully we have been able to widen our customer base, and especially for those younger customers, this is really important. Of course, continuing investing in sustainability is fully in line with our own values, so we also feel that this is important and something we want to do. To answer then to your question, so yes, you are absolutely right that this will require investments in order to get to the targets. Actually, this isn't anything completely new. This has been on our agenda quite a while already.
Sustainability is about continuous improvement, so taking steps by step forward. This is a long-term sustainability strategy, so we just need to manage it in a sustainable way. Thanks to scale, great thing is that we're gonna have these scaling benefits, especially in our supply chain, so in sourcing, and also in fixed costs. Those will help us to balance the investment that we need to make, for example, into sustainability.
I think during your presentation you mentioned value-creating opportunities. Can you talk a little bit more about these?
Sure. Three things come to my mind. First one is about widening our customer base that I covered in my previous answer, but that is a really big driver, attracting new customers. Secondly, I would highlight completely new service and business models, for example, the Pre-loved that we just covered. Thirdly, I would mention completely new categories and concepts which are more sustainable. For example, our new Marimade concept that Rebekka will tell you a little bit more in a bit. In order to make sure that we actually capture these different opportunities and leverage them in a best possible way, we established our internal team, Innovation Works, last year. That team is all about promoting innovation and paying attention so that we can capture these kind of possibilities.
One final question.
Yes.
I think you mentioned, and we can all agree that our sustainability ambition is very high and extends to our entire value chain. How do you lead the work to develop sustainability at Marimekko?
Well, sustainability is a journey. This is our joint journey. Every single Marimekko employee has a super important role to play there. It is critical that everybody knows exactly that, what is their role and how can they contribute into this work. This has been actually super meaningful for everybody here at Marimekko to even push the pedal a little bit forward and accelerate our sustainability efforts. Perhaps that's why also it has been actually quite easy to get everybody on board. But yeah, on top of this, we use quite practical ways of managing this as another transformation program. Really looking it from, like, a program office perspective that where we are going in different streams and tracking the progress and so forth to make sure that we will reach our targets.
Thank you, Riika.
Thank you, Essi.
I think then it's time for C, our second letter. Rebekka, please guide us through Marimekko's creative vision.
Good afternoon, everyone. I'm really excited to be standing here today, and I'm really excited to have this opportunity to talk to you a little bit about what goes into the work, into the actual assortment work, collection work at Marimekko. My name is Rebekka Bay. I'm the Chief Creative Officer. I prefer the creative director title because I think that is what I do. Today, I will be talking about our creative vision, how we then speak to a wider audience. I think what's important to understand is that creative vision is not start, stop kind of work, that creative vision is something that is constantly evolving, and it's something that is in dialogue with our markets and with our consumers. There is not such a thing as a creative vision, you launch it, and then you leave it.
When I joined Marimekko two years ago, that was actually the beginning of some of the work that we're starting to see now, you know, and seeing the responses from our markets. When I joined, I really felt that we needed to create more structure around our assortment building, more structure around the product we develop in ready-to-wear, which is our fashion component, in bags and accessories, and in home. I felt that we needed to build a little bit more of a framework or principles or a roadmap to how do we deliver consistency in the work that we do. The first thing we did was actually to launch a new assortment strategy, and I don't know how familiar you are with this sort of quite traditional fashion triangle.
It is traditionally used to illustrate fashion segmentation, so you would have luxury at the bottom, fast fashion or accessible fashion at the bottom. We're not using this pyramid or this assortment strategy in the traditional way, but we're using it to understand the different roles of our assortment or the role that the different parts of our assortment play towards our customer. If you look at the pyramid, you will see that we have concept at the top, we have collection in the middle, and we have Kioski, one of our most sustainable concepts in ready-to-wear, at the bottom. We have really identified what is important for us to successfully create assortments that are relevant in not just all our markets, but also through all our channels.
If I start at the top with concept is really where we honor our legacy. This is really where we honor this idea that the dress is a canvas for a great piece of art. It gives us opportunity to collaborate with artists. It gives us opportunity to exaggerate or to create more bolder statements, and we use concept as our spearhead in communication and brand campaigns. We're not looking at this pyramid as each segments are not reaching into the next, so there's a trickle-down effect from what we do in the concept part of the assortment in the collection part. The collection part is the majority of what we do in ready-to-wear. This is our most timeless high quality, combinable wardrobing product.
This is where we really address the needs of our customer from she gets up in the morning till she goes to bed at night, from her working week to her nights out to her weekend needs. Here, we have all categories, and the categories work together, and this is also where we focus on product that will have longer lifespan. This is where we really constantly evolve the collection. Of course, concept and collection are integrated into each other, and they are easily combinable. Then we have the newest layer, the bottom layer, which is really not the bottom layer of any pyramid.
We felt a strong need to really build something that is really accessible or understandable, something for our new consumers, our new markets to easily sort of almost like as an entryway into the Marimekko brand and the Marimekko assortment. Kioski is our most sustainable entity in ready-to-wear bags and accessories. We're addressing upcycling, recycling. We're always making better material choices, and we're really celebrating also what it means to use leftover fabric or surplus fabric and integrate that into the positioning of Kioski. Kioski is also, as Tiina mentioned in her opening remarks, our to some extent genderless concept. It is not all of it. There's dresses in Kioski, but Kioski have a product mix that allows both men and women to wear the product.
The second step we took, and don't leave today and think that this is all we do. This is not all we do, but this is what we're opening up today. The second step we took in strengthening the collection building was to sort of identify the most important points to ensure consistency in the collection building, and we identified three important key areas. The first one being that we really believe we need to create recognizability in our silhouettes, and we refer to those as archetypes, as much as we have recognizability in our prints. Secondly, we really wanted to create better consistency in fits and in size. Thirdly, we needed to address how to create more flexible or more modular collection building in order to address specific needs in specific markets.
If I go a little bit more into what this means is that in our when we built out silhouettes, referred to as archetypes, we looked back at our archives and really wanted to celebrate the most recognizable silhouettes within the world of Marimekko. We identified the A-line and the straight, and then we decided to actually also add in the combination of the two, the fit and flare silhouette, in order to address needs in markets outside of Finland. Maybe we have a North American consumer, or maybe we have an Asian consumer who wants something a little more flattering or something a little more feminine.
We're consistently using the same silhouettes and the same archetypes across all our different categories. The need to build consistency in fit and size was something that is important to create continuous loyalty, and also to ensure that our customer understands that when she buys something from one category or from one season, that she will be able to buy into the same size or the same fit the following season, or two seasons, or four seasons down the line. Of course, the consistency is also increasingly important as we're now focusing much more of our sales in our online business, where you don't have the ability to try on the product. Here we identified what is most important for Marimekko. It is a slim fit, a relaxed fit, an oversized fit.
Never anything restricting, never anything that wouldn't allow you to move freely, feel comfortable, or to run in a dress. We then identified the fit points to those. I'm not gonna go into too much detail here. You can ask me any time, and I will explain what is the difference between a slim fit, a relaxed fit, and an oversized fit. We also needed to build consistency in sizing, so that if you are a size small or a size 36 or 38, you will be that same size across all our different categories, so it doesn't matter if you're buying a dress or a piece of outerwear or a pant. This is ongoing work. We introduced the first new fits and the first new blocks, which is how we refer to the starting point of a fit, in the spring of this year.
Of course, it takes time to introduce all these changes across all our categories to communicate this to our customer and also get the customer feedback. Because if there's not such a thing as, you know, one size fits all, so now we need to hear back from our customer, we need to tweak, we need to continue to be in dialogue. Then thirdly, the newest initiative is that we have added increased modularity in the assortment building or the collection building. This might sound really banal. Yes, let's more flexibility, or let's add more modularity, or let's be better at addressing specific needs by channel or market, but this is not something that is traditionally done when you build ready-to-wear collections.
We have now established a practice where we will build the core of our assortment, and then we will add in these channel or market-specific capsules. Capsules could be a Lunar New Year capsule for our Chinese market. A capsule could be a specific moment in our Japanese market, like a Sakura celebration. It can be a value-based moment. We have long worked with Helsinki Pride, and we will create a celebration around that. I think you get my drift. It's really to understand what is happening culturally, what which kind of occasions are happening, how can we ensure that we're relevant in all our different markets and also in our different channels. I thought I would just give you a one page to show you what it looks like when someone starts to create consistency in a silhouette.
This is actually the first time I have pulled together one silhouette across four different seasons. This is literally starting from left going to right, the A-line silhouette that we have utilized over and over from spring of this year to spring 2020. This is continuous work. Of course, as Riika already opened up, sustainability is at the core of everything we do. In the design process, we start every season by looking at how we can do better. How we can do better also sounds like a vague expression, but it is because we look at how we can do better or make better choices across everything we do.
We will kick off a season by identifying potential new entities or new materials, or how we can move from conventional to more sustainable materials, or how we can incorporate innovation or innovative materials in partnership into our collections. Everything starts with us addressing how can we make better, how can we do better, and we try to, whenever possible, to do better actually in our most commercial entities, because that is really where it matters the most. Then we're constantly launching also these initiatives that will really sort of have a distilled focus on more sustainable practices or more sustainable entities. I already mentioned Kioski when we looked at the assortment strategy or the pyramid as the entry point into the world of Marimekko or as the entry point for new consumers, new markets.
Kioski is also, and I mentioned this already, our most sustainable concept in our ready-to-wear bags and accessory category. Everything we do with Kioski product is always in moving from conventional to more sustainable materials or utilizing leftover fabric or recycling, upcycling to create new value. Kioski is also the easiest access point to Marimekko, so this is really where it makes a difference. If you are to take only one piece of Marimekko away, it will be a piece of Kioski, almost like a souvenir of Marimekko, and that piece will be sustainable. We have only a few weeks back launched Marimade as our most sustainable concept in home. Marimade is almost like a sister to Kioski, but Marimade has this random aesthetic.
The reason why Marimade is utilizing a random aesthetic is we never know what material is available for Marimade. Marimade is really built on this belief that we can upcycle and recycle material, and we can partner in creating bio-based materials to market. Marimade will be changing based on the material that is left for us to use, and will continue to celebrate an aesthetic where there's randomness and less of matching in the collection because we will utilize leftover fabric from either our own printing mill or some of our other production places. Of course, my final slide will need to address the importance of Asia. We speak to Asia because it's the letter A, but of course, we are aware that Asia is not a country. Asia is different cultures and different countries.
Right now, a lot of our focus is on Japan and our growth in China, but of course, we also understand that as we're growing in some of our other South-Southeast Asian markets, we will also increasingly need to understand the practices, the cultures, the wants and needs of the consumers there. Everything we're doing in the work, the assortment strategy, re-creating recognizability in silhouettes, creating blocks to ensure consistency in sizing and fits, and adding modularity into our assortment building is so that we can address the needs of our Asian consumer better. Already now, we're identifying the most important silhouettes, the most important fits, the most important sizes, and we're converting sizes from Western sizes to Asian sizes to ensure that our product stays relevant in Asia.
We're also working with our Asian partners to identify what are the most important colorways, what are the most important color harmonies, what is the scale, which scale of a print, which print is better in those markets, so that we can really target and stay relevant and continue to be relevant and build communities in those markets. Then, of course, the modularity, which I already spoke about, really allows us also now to tap into these occasions or specific cultural preferences in those markets. I think that will be my final slide.
I think what's really unique in what we're building now for Marimekko is that we have an opportunity to define new luxury, and that we at Marimekko, in new luxury, can address and bring to market sustainable, timeless product that will bring joy and optimism to people's everyday life through the art of printmaking. Thank you.
Thank you, Rebekka. I find this fascinating, and I would have a couple of questions for you as well, if I may. You referred to Marimekko as new luxury, and that got me curious. How do you position Marimekko in relation to our competitors?
I think when I refer to Marimekko as new luxury, then it's because I don't, there's no real competitors in this space that we inhabit. I think often when we try to identify our competitive landscape, then we're looking to luxury brands. Maybe we will look to someone like Hermès, and we recognize that there's similarities in how we work with craft and how we are spanning both ready-to-wear bags and accessories and home. Or we will look to someone like Prada, because Prada, like us, have this ongoing dialogue with the arts. I think if we're looking sort of more linear in the landscape that we're in, then we could look to GANNI. GANNI have, you know, a strong positioning in terms of sustainability. They have, they're very print driven.
We have 3,500 prints in our archive and 71 years of history. We could look to someone like HAY that, similar to us, are also in this constant collaboration with new designers or bringing innovation to market. We have both home ready-to-wear and bags and accessories. It's really difficult for us to identify really what is or who is our closest competitors.
I think, Riika, and you as well mentioned innovations in your presentations. What's the role of material innovation in collection building?
Similar to, I think I mentioned that the collection work always starts with us addressing sustainability or how we can do better. Innovation Works or the innovative materials really plays a huge role in that because there's one method is to shift from conventional to more sustainable materials. Another method could be to help commercialize innovative materials and bring them to market. We both partner and we ourselves investigate new materials and how we can commercialize them and bring them to market.
This was a nice bridge to my next question about 'cause I think it was Tiina who mentioned earlier that Marimekko is marrying its creative vision with improved commerciality, if I got it right. In the context of the fashion and design industry, I have understood that commerciality can have a negative connotation. How do you, as the creative director, approach commerciality in Marimekko?
At Marimekko, commerciality actually means relevance. Commerciality means understanding what is our consumers' wants and needs. Commerciality means understanding how to utilize different channels for different types of concepts or entities or categories. At Marimekko, everything we do is sort of embedded in this belief system that the art of printmaking and commerciality is like a perfect pair.
Your last slide was about Asia and meeting consumer needs in Asia being the key. What measures are we taking to ensure that we know our customers in these markets?
Of course, being based in the Nordics, it takes a little more effort to really understand our Asian consumer. Of course, we utilize that we have a direct-to-consumer model. We utilize that we have really strong partnerships in Asia. We have a team based in Shanghai. We have a longstanding relationship with our partner in Japan. We will utilize, of course, their knowledge of the market. We have direct access to data. We utilize consumer groups. We utilize insights. Of course, we constantly are, as I mentioned previously, we're in this constant dialogue where we're constantly proposing and receiving feedback and then tweaking, adjusting in order to ensure the relevance.
Thank you, Rebekka.
Thank you. Thank you.
Rebekka's last response was a great bridge to our next letter, A. Heidi, the floor is yours.
I am the head of market area Japan here at Marimekko, and I will walk you through the letter A of our strategy, which stands for Asia. Also going forward, our main markets will continue to be Northern Europe, North America, and the Asia Pacific region. In our new strategy term, we will focus even more on accelerating growth in Asia. Now, there are several reasons we consider Asia to be the most important geographical area for international growth. Firstly, from the macroeconomic point of view, the growing middle class and young population, the continuous urbanization and digitalization presents us with great opportunities in the region. Second, our brand story, our values, our unique mission to bring joy to people's everyday lives resonate well with the Asian consumer, who is increasingly value-driven and seeking for meaningful experience.
We can already see positive results of this genuine brand fit in our growth strategy so far. Lastly, we have a proven track record of a successful partnership model in Asia. This is a loose franchise partnership model that enables us to grow with low risk and CapEx requirement. I want to spend a moment on the loose franchise partnership model because this is a model that truly plays into the complementary skills and strengths of Marimekko and our local partners. In our business model in Asia, our local partners are responsible for covering the cost of opening stores, running the retail operations locally, thus making it very low risk and low CapEx investment for Marimekko.
Our local partners also use their existing capabilities and their well-established networks in order to leverage a strong negotiation power in the market, meaning that they're able to secure the best retail locations, attract local talent as staff, and in so doing, they're able to accelerate the market entry and scale the growth in a very effective manner. What is as equally as important, our partner has deep knowledge of the market and consumer expertise locally. They have the finger on the pulse of the market, ready to make adjustments whenever there's a change detected in the consumer behavior. On the other hand, Marimekko, we as the brand owner, we provide our partners with a product portfolio of sustainable lifestyle products. We also equip our partners with inspiring storytelling and marketing concepts so that they can grow the brand awareness and desirability in the market.
We have a very important role in guiding our partners in creating a brand experience that is globally coherent, but is unique omni-channel brand and store experience that is then together jointly localized to meet the specific needs of each market and each country in the market. In the end, the experience in Marimekko, either own retail-operated store or the partner-operated store, is equal. As our new strategy builds on the proven success recipe we have had in the past years, I want to take this opportunity to present a success story from our most established and most important international market, Japan, where we have had a relationship with our partner for over 17 years. Next, you will hear from Mr. Tada, who is the president of our partner in Japan.
日本国内の主だった商業施設、こちらにはほぼ軒並み出店している状況。かつ近年ではオンラインの売り上げも増加していると、そういった状況です。北欧を代表するライフスタイルブランドとして、マーケットにおいて確固たるポジション、こちらを確立していると、そのように考えております。まずは一番最初ですね。インパクトのある良いスタートを切れたということが、その後の成長につながったと、そのように考えています。日本で第一号店を表参道にオープンするその数ヶ月前ですね。2005年の月、東京表参道のスパイラルホールでマリメッコ展というのを開催しました。このイベントではマリメッコの世界観、これを共有していただくとともに、そのマリメッコの認知度を飛躍的に高めるという点で大変意義のあるイベントだったと、そのように考えております。その後、数ヶ月後の2006年ですね。東京表参道や大阪、京都、そういった主要立地に一気にマリメッコのショップを7店舗オープンしたというのも、当時マーケットに大変大きなインパクトを与えたと、そのように考えております。その後、リーマンショックや東日本大震災などいろんなことがありましたけれども、2020年に至るまで一店舗も出店をしなかった年は一年だけ。その一年以外は毎年着実に出店を重ねてきました。インパクトのあるブランド政策とぶれることのない継続性、これがマリメッコのヒストリーを築き上げたと言って過言ではないというふうに考えております。大きく二つあると、そのように考えています。一つは、マリメッコを日本で必ず成功させるという圧倒的な自信と情熱を持って仕事に取り組んだということだと思います。今から約20年ぐらい前だと思いますけれども、日本でぜひマリメッコを展開したいと思いまして、私がフィンランド・ヘルシンキのマリメッコの本社を訪問しました。その当時はまだ課長でもない平社員の私の話を、当時の社長だったキルスティ・パッカネンさんという方がいるんですけど、非常に熱心に聞いてくださり、その後わずか2回のミーティングで契約書にゴーサインを出してくれました。マリメッコのブランド力とその可能性を信じて、とにかく何事も前向きに、明るく元気に仕事に取り組んだことが、その後の成長につながったと、そのように考えております。そしてもう一つは、マリメッコ社と私たちの固い絆、信頼関係、協力関係にあると、そのように考えています。家族のような絆で、良い時も悪い時も一緒にブランドの成長のために力を合わせてきました。今現在、世界の状況を見ると、政治的にも経済的にも非常に難しい問題、課題などを抱えている状況だと思います。そんな時だからこそ、ファミリーの気持ちを持って、ブランドの成長と、あとはお互いの繁栄のために、今まで以上に力を合わせていきたいと、そのように考えております。
I want to take a moment just to echo and reflect on some wise and powerful words of Mr. Tada, and if you are familiar with the Japanese culture, you know that these are very powerful statements coming from him. He mentions having overwhelming confidence and passion towards the Marimekko brand. He speaks about us having a strong, almost family-like bond that has ultimately led to the unwavering continuity of our partnership spanning for over 17 years. Through natural catastrophe, through financial crisis, through thick and thin. I believe that this speaks volumes not only of the nature of our partnership, but something that is very uniquely powerful to Marimekko.
It is that the love and passion we feel towards Marimekko isn't limited to something we experience within the company, but it's something that we share with our partners and customers alike, and it connects us as a Marimekko community. For our partners, it is this kind of profound understanding of the core DNA of the Marimekko brand that is as equally as important as their business or retail capabilities, because this is the key ingredient that can determine how well our unique brand is translated in the market. Another more recent success story I want to highlight is our journey in Thailand. In just 7 years, Marimekko has already opened seven stores in our key city, Bangkok, and three elsewhere in Thailand.
Last year, a Marimekko online store was launched, and just this July, a Marimekko pop-up cafe was opened next to a Marimekko store in one of the main shopping centers of Bangkok, offering our customers a full lifestyle experience. To put it in short, going forward, there continues to be tremendous opportunities to be captured within our existing markets in Asia. Currently, Marimekko has a network of around 70 stores in Asia that are supported by our partner-operated e-com platforms in Greater China, Japan, South Korea, and Thailand. Driven by the continuing urbanization, large population, and high e-commerce penetration in the region, we see that there is still significant growth to be gained for us by focusing in scaling up the business in this region. However, given our growth ambition, in the long term, we are also very excited to explore opening new markets in Asia.
When we are evaluating some of these potential new markets, our key criteria include a growing economy and middle class, a target audience match. Is there a crowd of digitally savvy young population ready to be inspired by our joyful aesthetic value and design philosophy? A suitable partner with omni-channel capabilities. Can we find a partner who is aligned with our values, who has a profound understanding of the Marimekko brand, and who has the ability to create Marimekko ecosystem comprising of a network of physical stores, digital experience to couple that, as well as complementary selection of wholesale retailers? Next, allow me to illustrate the role of Asia for Marimekko in the global context. When we look at the global Marimekko ecosystem, we can see that each of our key markets play an important and distinctive role.
Starting from Finland, our beloved home market, our steady fortress, it is the engine that is fueling our international growth. We have North America and Scandinavia, who play a key role in both contributing to the sales, but also in introducing and positioning our brands to a next generation of customers. Asia for us is the key growth generator, both in terms of the sales revenue, but it's also our gateway of tapping into a wider target audience. In each of our key markets, we have identified global key cities, and next allow me to illustrate what we mean by this and how we approach them. We tap into our main markets through global key cities. These are cities that have the impact to build demand both on a local and global level.
We know that in the retail and fashion context, there are cities such as Tokyo or New York who are these key opinion leader cities with a global impact. In these key cities that we have defined in our strategy, in order to capture the sales and maximize our efforts in this region, we create ecosystems of Marimekko stores. Also, we couple them with a seamless digital experience and complement them by physical and digital wholesale retailers. We attract new target audience into these ecosystem with local and global brand collaborations. We also activate our key cities through different ways, by hosting meaningful events, brand collaborations, by setting up experiential and inspirational physical spaces such as pop-up stores, and by introducing new and exciting digital experiences.
These activations will then in turn act as talking points, creating more brand awareness and excitement on a global level, creating a positive ripple effect. I'll give you a concrete example of a local activation that we did in a key city. When we first launched our Marimekko Kioski collection, we decided to do that in Tokyo in collaboration with one of our retailers, Dover Street Market Ginza. You remember from Rebekka's presentation that Marimekko Kioski is the entry point to new markets and new customers for us. Dover Street Market Ginza, on the other hand, is a globally known iconic fashion retail destination.
For us to launch the first-ever Marimekko Kioski there with a pop-up and with an impactful installation of our most iconic print, Unikko, instantly positioned Marimekko Kioski as something credible, as a new and fresh, interesting fashion concept in the eyes of our target audience, but also in the eyes of the global media and other influential wholesale retailers. Now we've come to the end of my part of the presentation, but I would like to leave you with a few summarizing thoughts on our strategy in Asia. The growing market size, brand relevance, and match with our target audience present us with great growth opportunities. We have a loose franchise partnership model that enables us to grow in the market with low risk and CapEx requirements.
Our objective is to capture the growth in our existing markets through building Marimekko ecosystems in our key cities, and we're also very open-minded and excited to explore opportunities in opening up new ones. Thank you.
Thank you, Heidi. Letter A really demonstrates scale quite nicely. I was wondering, what will be the main measures to accelerate growth in Asia? Where is our focus?
Yes. You already heard from Rebekka how we will increase measures in building up the relevance from the product point of view, but we're also doing this in terms of our customer experience. As we have a partner model, we have a great asset in our partner in really localizing our efforts to build the relevance, so making sure that we are connecting with the local consumer, local communities, and local culture. In terms of distribution and sales, we are expecting to grow our online sales, but also expanding our physical network of stores in our existing markets, but also in the long run, exploring completely new ones. Finally, I would lift up the global and local brand collaboration as a driver for building the brand awareness and desirability.
You mentioned that the loose franchise partnership model is low risk, but that, does that model also mean that Marimekko is not in control of its brand in these markets? Hope not.
The short answer to your question is no, that Marimekko is in control of all of our brand elements. The loose franchise partnership model is something that we applied in the Asian markets for over 17 years, starting from our Japanese partner. It's something that we truly have a proven track record of, that this is a model that enables us to maintain the global consistency when it comes to the brand experience, but also leverage the strengths of our partners in order for it to be locally very relevant.
Thank you, Heidi.
Thank you.
Now it's time for a short, about 10 minutes, break, and I think we'll be back 25 to the hour. Please enjoy the refreshments. Thank you.
Welcome back. Hope you had a refreshing break. Now it's time for the letter L. Welcome to the stage Team Love.
Everybody. My name is Sanna-Kaisa Niikko, and I'm the Chief Marketing Officer at Marimekko. Here on the stage with me, I have Tanya Strohmayer, who will introduce herself a little bit later on. We're excited to talk today about Marimekko love for the Marimekko life. Of course, we are in the business of emotions. That's what the fashion and design industries are all about. All brands would really love to evoke love and emotion, but that's not something that all brands can do. We can. We have for already more than seven decades. This is definitely a true distinguishing factor and an opportunity for Marimekko.
Our five cornerstones for building brand love and engagement with both our customers and our employees are our unique value-driven brand story with the optimism and art of printmaking at the heart. We want to create creative brand experiences and connect the Marimekko lifestyle with local cultures. We will and we have embarked on brand collaborations of different sorts to really connect with customers that have not necessarily yet met us before, so new audiences around the world. We want to build the Marimekko lifestyle experience together with our customers. As a brand, we are very value-based. We are very inclusive, and we want to do this together with the customers.
Last but not least, we will continue building on our strong values and our strong purpose-driven culture also internally. We want to foster this Marimekko love also within the company. If we first talk a little bit about our unique brand story. This has been and will continue to be one of the key success factors for creating even more brand awareness globally and, of course, fostering brand love. The story of Marimekko is a story of optimism. Even when Armi Ratia first founded the company back in the 1950s, she wanted to create something that would bring joy and energy to the post-war Finland.
Of course, Finland back in those days, like Tiina mentioned, was not a very positive place, and she wanted to energize people and do something that would really ignite new energy in their everyday lives. This is definitely relevant also still today. The world is quite polarized in this moment, and consumers really gravitate towards us because they want this everyday joy in their lives. Definitely Armi's vision is very much in our lives also today. She actually said that Marimekko didn't necessarily have to be about prints or colors or dresses or products. For her, Marimekko could have been equally well a flower shop, modern jazz, ice cream. It didn't really matter. To her, it was all about the positive lifestyle philosophy, and that's something that we want to build on even today.
Of course, Marimekko is still all about the art of printmaking, and that's a very unique thing at our brand core. That's something that also attracts a lot of partners for us. For example, many of the brand collaboration partners have been extremely impressed about the way that we're able to make the world of prints and color relevant for our consumers. Also the art of printmaking connects us very naturally with the world of creativity, arts, and design, and this is something that we can also foster and build on as a way to connect with our customers also in the future. Of course, third, sustainability, like Riika very well mentioned earlier, is at the heart of our value base already.
We think that making sustainability even more meaningful for our consumers and helping them understand why sustainability is a good choice and a better choice for them will help us connect with our customers even better in the future. Going forward, we want to focus even more on creating different kinds of creative brand experiences in our key markets connected with local art, culture, and creativity. Actually, with the art of printmaking, we have a very unique opportunity and a very kind of credible way to connect with this world and connect with, for example, different kinds of institutions, art institutions or design institutions around the world.
We want to elevate our customer experience, especially of course in physical retail, but not only, by connecting with different kinds of meaningful cultural events or different kinds of consumer moments in the world. For example, here in our home market, we have now for many years already partnered with Helsinki Pride to take a stand on things that are meaningful both to us but also our customers. We have mentioned brand collaborations quite many times already today, but they are truly important for us and a great way for us to meet new consumers around the world. Also here, actually, the art of printmaking is one of the key drivers for doing this and a very kind of natural way for us to embark on different kinds of collaborations.
We will focus on especially global, very impactful big collaborations like brands with like brands such as adidas or IKEA, for example. These are opportunities for us to reach wide masses of people, very impactful. We will also work on different kinds of more like positioning building collaborations in the world of especially, let's say, fashion or design, the like the ones like Maison Kitsuné that we have now launched during the summertime. We will work on different kinds of local collaborations. For example, this year and last year, we have worked with a couple of Chinese brands who are locally extremely relevant to become even more ingrained into the kind of local culture and build our consumer base in this very important growth market of ours.
Of course, the beauty of brand collaborations is that in addition to creating brand awareness and reach to new customers, they typically also work as a way for us to gain licensing income. Finally, of course, key strategic wholesale partnerships also play an important role for us, and in a way they are an extension of brand collaborations. Key global retailers, either physical retailers or e-tailers, will be an important way for us to reach new customers. Here we have then a short message from one of our dearest collaboration partners.
Hi, my name is Aimee Arana. I am the GM for Sportswear and Training at adidas. Collaborating with Marimekko felt like such a natural and perfect fit as we both share the same values in driving design, function, and style. We also both share a super rich history in pushing the boundaries of innovation and style, and I'm so proud of the pieces that we brought to life within our last four collections. One of our biggest achievements so far has been creating collections that transcend cities from around the globe. From Helsinki to London, to New York to Tokyo, we see our communities from around the world loving and wearing our product. The collections also span many sports, from running to training, from swimming to cycling. We've created looks that serve all athletes.
My favorite piece from our latest collection is our sport hijab, which is made from breathable fabrics and supports athletes through their every move. It's been so inspiring to collaborate with Marimekko and the entire team, and I'm incredibly proud of what we've done so far.
A pleasure working with the adidas team. Finally, we want to also, in the future, grow the Marimekko phenomenon together with our customers. This is actually quite a proven recipe for us already, and we have done this for quite some years already, but we truly believe in this opportunity. As said, we are a very value-based and inclusive brand, and of course, when we take our consumers into our story, they will also work as ambassadors for us in the different parts of the world. We will definitely continue on this path. Social media and PR will be extremely important for us as different communication channels. They are very impactful.
Of course, paid media will also play a role in this equation, but especially, social media and PR will be some of the cornerstones for our communication strategy. Diversity and inclusion are at the heart of our values already, and this will be an important part for us also in the future. Last but definitely not least, deepening our understanding of our customers will be a key success drivers for us. Of course, we have our direct-to-consumer retail, which offers us a lot of opportunities in terms of getting to know our customer better. We have a great community program as well that we can leverage for even more data insights in the future. I will hand it over to Tanja.
Thank you, Sanna-Kaisa, and good afternoon on my behalf as well. My name is Tanya Strohmayer. I'm the Chief People Officer for Marimekko. I'm happy to continue the letter L, where we have actually defined critical focus areas for our future growth. We believe in Marimekko that meaningfulness of one's work leads to committed, driven, and engaged personnel. As Marimekko as a company has such a strong purpose, and we combine that with our unique work atmosphere and working culture here in Marimekko, we feel that we are able to provide a good platform for our employees to grow and develop with our company, together with our company. I think that's a really good foundation, first of all, for future growth. What else is needed? I want to say a few words about the high-performance culture.
In order to drive continuously high-performance culture in a very systematic ways, of course, it is very strongly anchored to our values, our Marimekko Spirit values, our creativity, and our entrepreneurial mindset. With that combination, we feel that we have a really good foundation also for the people strategy. We have been already for several years, and continue to do that in the future, that we continuously find ways to develop our employees in terms of mastering the performance management process. How to kind of master and drive your own performance, and how, as a leader, enable your team to grow and develop and be very much connected to the overall strategy of the company when it comes to your own objectives. We want to build even more global leadership culture in Marimekko.
We want to be known for our great and inclusive leadership culture. Of course, not to forget very important factors, we want to understand all the time better how to promote in different ways diversity, equity, and inclusion in our everyday work. We believe that with these ingredients, it is definitely a recipe for future success. Also today, I want to highlight some of the recognitions and achievements that we have received as a company. In Finland, we have been ranked very high in several employer surveys recently. Of course, we are very happy to have a strong, even excellent level eNPS in the company, and that's based on our several employee pulse surveys that we have had going on during the recent years.
On top of that, we of course want to continuously focus on growing our company internationally. How to do that? First of all, we have established these hubs in different cities in different parts of the world. We have currently a hub in Shanghai, New York City, Copenhagen, Stockholm, and Melbourne. Now we are able to truly attract the local talent as well to work for Marimekko. We are able to be very close to the consumer, and of course, now these hubs are very much aligned with our key city strategy. We are already spreading our wings in different parts of the world and focusing in a good balance between the headquarters operations here in Helsinki, as well as the global hubs in different parts of the world.
Today, I want to end with a very important thing for all Marimekko employees, and we are so excited in Marimekko. I can probably say this on behalf of everyone, that we continue to cultivate the love for Marimekko life very strongly also internally, and that's definitely very meaningful for all of us. What else is important in today's world than having a strong purpose, and you feel that your job is meaningful? That's definitely something we're going to continue to do going forward.
Yes. Thank you, Sanna-Kaisa and Tanya. I would have a couple of questions, if I start with you, Sanna-Kaisa. Scaling the business during the next five years will require us reaching a significantly wider global audience. How will we achieve this?
As said, we have, I believe, found a very well-working recipe now in the past years. Of course, brand awareness building and brand building overall is always long-term work. Focusing on, of course, our value-driven brand story, focused especially on optimism and the art of printmaking, will be very distinguishing for us, actually. It's something that really stands out in the competition. Also, working further on earned media creation, including PR and social media, will be key ways to do this. Brand collaborations absolutely are a fantastic way for us to gain new audiences very effectively in an extremely impactful way. As said, we also want to take our consumers together with us on this journey, so they will be with us creating this brand story together with us.
You said that brand collaborations have been mentioned a few times this afternoon. I'm gonna do it at least one more time. I'm curious what kind of collaborations are we currently exploring?
The starting point for any collaboration is always a brand match and a value match. That is where we always start. Of course then, on the kind of other points of view, the global relevance is one thing that we look into, the global reach that we're able to gain. Also, we explore these local opportunities that help us inject ourselves even better into the local culture.
No names?
No names at this point.
Tanya, cultivating love for Marimekko life also internally is one of the top priorities in the coming years. Marimekko has already been recruiting new talent to support our international growth, leading to increased personnel expenses in the past quarters. Should we expect increasing HR investments going forward?
Well, I don't know. I want to first start with the fact that I always believe that the most important thing is to have the right people in the right places, so that has been kind of our underlying important success factor for many years now. If I take you a little bit back in time, we have actually started to upgrade our competencies and continuously develop our skills and capabilities within Marimekko for several years now. We have started, kind of, make us ready for the future's growth already in the past. One example, which Rebekka also mentioned, that we have now, for example, an own office in Shanghai. We have our boots on the ground in China, and we have the local knowledge and skills now to lead the business in China.
We've been doing these type of important investments already for some time now. As for this year, for 2022, we have already highlighted, as you said, that we are investing in new resources, and we've been hiring very skilled key individuals into the company in order to be ready for this new strategy period. When it comes to the 2023-2027 scale strategy period, we see that we have already now a very solid talent base in the company. We don't see any major investments in the recruitments or increase of personnel going forward.
Of course, you know, we need to see that, you know, how the world is looking and doing then some considerations, but no major investments are necessarily needed anymore as we have the talent base in place.
Another final question. How does Marimekko's ambition to scale internationally translate into our people strategy?
Of course, this is very much in the core of our people strategy. Have been for many years already. Maybe the major kind of underlying thought is always to be close to the customer, and we want to serve our customers the best we can. That's why we have these local organizations, the hubs that I mentioned in Shanghai, New York, Copenhagen, Stockholm, and Melbourne, and those continue to be the important hubs where we not only recruit local people for the local business operations, but we also recruit key individual talent who are perhaps in global roles, and they will be based in those hubs around the world.
We will have a really nice balance of talents here in the headquarters, Helsinki, Finland, and then some key individuals also in different parts of the world in these hubs. Another thing I want to mention, as the presence of our brand is continuously growing, I can already see that it's much more easier to recruit and attract talent into Marimekko outside Finland as the brand is, you know, becoming more relevant and they see Marimekko as an interesting alternative as a employer. That's definitely something that we are going to do more and more and also ensure that we tap into the local fashion and design industry talents that exist much more outside the borders of Finland than here in Finland. We have now...
Basically, the world is open, and we are able to recruit also in other parts of the world than only in here in Finland.
That's great news. Thank you, Tanya and Sanna-Kaisa.
Thank you.
Thank you.
Time for our final letter. Kari, please go ahead.
Okay. Thank you very much, Essi. Great, fantastic to be here. My name is Kari Härkönen. I'm the Chief Digital Officer for Marimekko, and I'm here to talk about the last letter, E, of our SCALE strategy. E stands for end-to-end digitality, and what we mean by that is basically the full sphere of digitalization that starts from the moment when we design the products, all the way to the end to, like, from the internal processes to the customer interfacing end of digitality, of course, the omnichannel retail. Before we dive into digitality in more detail, I wanna take a step back and look at our distribution strategy.
The whole philosophy or the full idea of the distribution strategy is that in the heart of it is our direct-to-consumer, so it means the physical stores and the online stores and both of these that are operated either by us or our partners. The direct to consumer is complemented by physical and online retailers, and this is done because we want to gain scale and access to new customers. Obviously brand collaborations, as Sanna-Kaisa, my colleague, put it very well and explained it thoroughly, is basically we want to have visibility, create brand awareness, and enable the growth that way. In addition, we have more traditional...
Basically in categories that we choose not to create ourselves or basically categories that need more customization, then we can also do licensing in a more traditional way just to complement the whole picture. Then the omnichannel customer service journey that is completely seamless is really important and is the key for a wonderful customer experience, and digitality is what enables it. Basically what we have done to enable this is we have created a set of omnichannel capabilities. More about those in the following slide, I will tell you in detail. It's secondly about customer-centric design thinking in everything that we develop.
Whether it's services in our physical stores or if it's digital products, we always put the customer in the center of it all, because at the end, they are to judge whether we succeed or not. It's good to take it into attention already in the development phase. Then to have extremely personalized experiences in our online store. Already today, when you go to the front page of our online store, the experience, the assets, the pictures, the products that you see there are completely customized to you using artificial intelligence. This enables us to do basically segment into the segment of one and offer truly personalized experiences.
Finally, in order to have good results in terms of marketing, we extensively use data to target and get the best return on marketing investment and also marketing automation to reach our own customer base that is already existing. All right. Omnichannel capabilities. Basically omnichannel capabilities are developments that we have done that integrate the physical and the online customer shopping experience. Just to give a few examples, we've already developed this for a few years or several years, and we do continue developing this. Just to give an example, for example, the reserve and collect, this allows customers to go in our online store and see the availability of a product in a certain store and reserve it to be able to go and see it.
This is extremely handy if you, for example, want to see and try on the piece of clothing that you have decided you wanna try to buy, but you wanna try it first so you can be certain that it's found there and it's waiting for you, and then you can complete the purchase if you like or not. The other way around, the endless aisle. This is something that has been in development during this year, and we have just launched it. It's been in testing, and we are right now in the process of scaling it. It allows stores basically to sell pieces that they don't have in stock. Let's imagine a situation that there is a nice dress, but the right color or the right size is missing.
They don't have it in stock. The store is able to ship it to you at home, and the customer can basically complete the purchase there in store. These are just examples of how physical and online retail is mixing and integrating due to digital development. Great. Even though we think digital first, our physical stores, they play a very important role in our omnichannel ecosystem. These are basically inspirational and experiential meeting places, and they're sort of built around a personalized service. This is extremely important, especially in markets where our brand awareness is lower. This is where customers can really go and be inspired and clearly understand the brand philosophy and the core values.
Basically, in the future, around this service theme, we believe that we are able to develop digital solutions that enable our customer staff to address you even more personally and to give even more personalized service. Finally, during the past years, as Rebekka also explained more in depth, we have been working a lot with different materials and different fits of the product and the stores. They are basically a natural place where people can go into and feel the tactility of our designs and experience the product in a very hands-on way. Finally, about pop-ups, as you may see in the colorful pictures, we are.
Well, we will continue developing our strong pop-up concepts, and it's a great way to build brand awareness and in urban settings in urban cities to reach a wider audience. I think as Marimekko, we are in an excellent place to do so because with such a strong expression and colorful image that we have, it's easy for us to convert that into something that is into pop-up concepts or creative store concepts that are really attracting and inspiring, so in a good place to do so. Right. Basically perhaps the biggest change now in this strategy term, we have been working in improving and developing a very competitive customer interfacing digital end, so our online store and our other customer interfacing touchpoints.
We have succeeded in that well. Right now we will shift the focus into more internal processes and the wider sphere of digitalization. We do this in order to increase the efficiencies, improve our agileness, and just to be able to drive the growth with this. The things or examples that we potentially are going to do. First of all, it all starts when we start creating the product. The 3D design technology has improved immensely in the past few years, and we are really able to create lifelike or picture-like 3D models of the products that we do. It's not only a design thing. This trickles down to everything from manufacturing to sourcing the materials, and even to selling in to wholesalers the products.
Obviously the best benefit of this is that we save the planet a little bit because we don't need to order in physical samples and have planes flying those from different places. It has really multiple benefits. In the supply chain part, we are using already artificial intelligence. We use it to help us build our product portfolio, our product lineup, and also to estimate better price points that meet the demand. Meeting the demand in terms of the really accurate price points also as well as the right product assortment. In logistics, we have already done automation during this year in our Helsinki warehouse that is operated by our partner.
We have automated the picking process to the extent that it has really improved our service levels. Of this, our wholesale partners as well as our end customers are benefiting in terms of faster delivery times and overall just better reliability in the full process. On the sales and service side, completely new digital products and services and translating physical phenomena into digital. Out of this, we already mentioned the Pre-loved, that is our peer-to-peer second-hand platform for secondhand clothing. That is a completely digital new business model that we have. Because it's year 2022 and we are talking about digitalization, we will mention the Metaverse, Web 3.0.
We are present in both of those, or it's the same thing at the end of the day. In that area, we are exploring and taking the learnings. Perhaps it's new technology. Is it mature yet? What are the opportunities? There's a lot happening right now in there, and we want to be present there to learn, and once the time is ripe, to be ready to act. Finally, to wrap it up, the reason why we are looking into the digitality of our internal processes and the wider sphere of digitality is basically to really improve our agility, to improve our effectiveness, and to enable the growth. Thank you.
Thank you, Kari. I have plenty of questions for you.
Oh.
Bear with me.
Absolutely.
Digitality throughout the value chain is one of the key success factors. I'm wondering, what part of Marimekko sales already is coming from e-commerce, and how do you see that developing compared to physical sales?
As I said earlier about technology that is integrating basically the physical and the digital sales, it would be hard to sometimes categorize what is what, so we have decided not to separate digital sales in our reporting. We report digital sales that are our own online store sales under retail and other digital sales channels under wholesale. The reason we do that is basically that we view our business as an omni-channel whole, and so do our customers, basically. You are not an online shopper, you are not a store shopper, you just want to interact with Marimekko, so it's important for us to have one interface.
What I can say about the success or the performance of our online sales is that we are very happy with the online sales of the past years and the development. We have been investing in the channel consistently. For example, now the results of Q2, our online sales grew strongly, and we are happy with the result, and that was according to our plan.
It was stated in the slides that you wish or we wish to take learnings from the most competitive online markets.
Mm
U.S. and China were mentioned. Can you elaborate on this? What kind of learnings?
Sure. Yes, that's absolutely right. When we started our online store in 2010, that's over 10 years ago, the most competitive market for digitality or online sales was the U.S. We decided to launch our online store there to take the learnings from the most competitive and advanced market at the time. Similarly, today, we chose to operate our own online sales in China through Tmall by ourselves because we think that right now that is the most interesting market in terms of digitality and the innovation that is happening right there.
Just to give you concrete examples of what we have gotten over the years out of these explorations is, for example, the importance of social selling or social media integration in our own online store, which we have been doing. Live commerce is something that we have been already experimenting in several markets and, for example, gamification as well. When we had our 70-year anniversary of Marimekko, which was a digital event, we included gamification elements into that. I think the overall learning is that, in the digital sphere, the competition is really fierce and we need to be out there.
I think as you know, at Marimekko with our creative approach and creative brand essence, we are in a very good position to achieve good results in there.
Excellent. End-to-end digitality is a way to improve efficiency, like you said. Could you mention some of the most important ways to do this in our value chain?
Absolutely. I think to start with, like, during the past strategy term and even before, we have been investing in sort of building up our own online store and our customer interfacing digitality, but we have reached a very good level, and right now we want to expand our focus and have a little bit the same mentality with the internal digitalization of Marimekko. As earlier already showed, there's several examples of what it can do, for example, with the 3D technology that starts from designing products to going through the value chain.
There's efficiencies that we can get in demand estimation using artificial intelligence tools in sourcing, and several good starting points that we can start to explore and find efficiencies. I'm sure that in five years' time from now, this journey will have been a very, very interesting one and a fruitful one, hopefully.
Finally, how will the accelerated digitalization improve our customer experience?
A good question. I think we are already on a very good path, and this is something that we have been concentrating on very much. We will obviously continue developing our omni-channel capabilities. To mention those, for example, you can see product availability in the different stores through the online store. You can do reserve and collect, so pick up a product from the store that you have reserved. Or within the stores you can have with our endless aisle solution, you can have products delivered to you that the actual store doesn't have in their physical storage. These are some of the examples.
Another interesting one is equipping in the future our store staff with digital tools to be able to serve our customers in a more personalized way. I find this extremely interesting to like further personalize the shopping experience in the physical store space as well. I will repeat the example of today.
What we have in our online store, the front page, for example, is right now completely personalized using artificial intelligence, but that can be brought much further and developed much further so that every single point of your interaction, well, I'm speculating here, every single point, but a lot of the interaction that you have with us through our online will be a personalized experience, and there artificial intelligence tools are in key role.
Thank you, Kari.
Thank you, Essi.
Now it's time for Elina to walk us through our updated long-term financial targets.
Thank you. Hi, I'm Elina Anckar, the CFO of Marimekko, and I'm very excited to start this new strategy period, and I'm fully confident that we can deliver according to it as we did in a previous strategy period. Yes. What does it mean in terms of the long-term financial targets? Going forward, we are targeting strong profitability by scaling growth. As Tiina already explained earlier today, the year 2021 was a record year for us, so we actually exceeded all of our financial long-term targets. To be honest, we did exceed some of them already during the earlier years as well, but I'm thinking about that we lived through the pandemic times.
When looking at our long-term financial targets, which we actually announced last week, when we look at the top line target, the new target is now 15%. That used to be over 10% earlier. We also raised the profitability target to be at 20% of the comparable operating profit to be at 20% of the net sales. This used to be 15%. Regarding the ratio of the net sales to net debt to EBITDA, that we actually have kept at the same level, so the target is at the year-end to be at maximum of 2. When looking at our dividend policy, there we didn't do any changes, so we are actually still aiming to pay a yearly dividend and over 50% of the earnings per share is the target.
Then I will actually go through here a very important part of the whole day, because during the afternoon we have shared with you the five strategic key success factors. Of course, as we have presented, the new strategy period is all about scaling profitable growth. I will actually now summarize the key growth drivers for the next five years. First of all, accelerating international growth by increased desirability of our brand and collections. Secondly, we will gain market share in Finland, which is then fuel into international growth. Continuing our growth in digital and omni-channel retail, especially in Asia, as you have heard today. And on top of that, we will explore opening new markets in Asia. We will expand our reach and acquire new customers through selected wholesale retailers.
Finally, our lifestyle assortment is catering for wide price point, which is supporting our growth. Especially now, when we are in a possible recession climate, that is definitely a strength for us. These are the core growth drivers in a nutshell for the next five years. Of course, I mean, how about the profitability? The key profitability drivers for 2023 - 2027 will be, first of all, of course, the scale that we are targeting sales growth across market areas. Next, I will actually highlight the factors that are gonna impact our relative sales margin. I will actually start with the increased pricing power, which is natural when we have a strengthened brand equity and desirability. Scale as a driver to support in supply chain efficiency.
Of course, like when we are purchasing more products to cater for higher sales, we get the scale benefits out of there. A very important factor is actually the increased operational efficiency, which will be actually achieved by end-to-end digitality in our whole value chain. We will work on that area. Sales mix between different distribution channels, that actually does have an impact for our relative sales margin as well. General market trend in logistics costs and material costs does have an impact to our relative sales margin. As we have heard today, the sustainability investments into our long-term competitiveness will have their impact to our relative sales margin. Finally, in short term, of course, the consumer confidence and the purchasing power in a possible recession climate has its impact to our margin.
Naturally, the scale benefits will actually come also from the fixed cost, and we will continue our tight cost control, but at the same time, do the strategic investments into the growth and reinforce our competitiveness as a company. This is what happens at the profitability side. Tina did explain earlier how much we have actually been able to leverage from the operational leverage already during the last strategy period. For that reason, I wanted to open up certain illustrative examples that we are actually able to do now going forward. Starting from the design, you can imagine that actually from design and product development point of view, you do exactly the same work for the dress that you sell for 100 pieces. It's the same work that you do for the dress that you sell for 10,000 pieces.
Definitely scale benefits there. We have talked about adding digital tools for this process as well. Definitely there is an upside over there. We look at the sourcing and production, as I've already mentioned, of course, in a natural way, when we are selling more, we will get scale benefits in the sourcing and in the production itself as well. When we look at the logistics, we are able to gain benefits, for example, by process automation of that process. If we look at our people, our talented people, our talent base is actually able to serve for a larger company. In reality, we don't need so much as we have already heard these sort of like employee related investments during these five years. We are able to cater for a larger business.
Finally, a couple of examples regarding the sales, increasing sales in e-commerce and then in Asia, where we operate with this partner, local partner model with the low risk and capital expenditure. Of course, we can still improve the, in our physical stores, we can still improve the sales per square meter. That is one of the levers that we see possible during the next five years. Of course, as the current operating environment is somewhat volatile, and there are many uncertainties. We wanted to quickly open up how do we actually maneuver in the current situation. First of all, I would like to say that naturally, of course, we are constantly monitoring the, economic situation, the consumer confidence, their purchasing power.
I mean, this is of course, we have been doing all of the time, but continuing doing that. Then actually adjust our operations and plans according to the circumstances. We've been doing that all of the time, but it's good to mention that, of course, in this situation as well. I would also like to share that in downturns, in possible downturns, typically Finnish consumers will actually go towards the domestic safe brands like Marimekko. That is something very good for you to understand as well. As a company, we have a very good starting point for managing the possible downturn with the stronger than ever Marimekko brand and collections. We are in a good level to take this on, whatever happens. I would like to point certain things that we will fight this again.
Of course, like, we will continue leveraging the brand hype, and we are dynamic in our omni-channel retail. We are looking ways how we support our wholesale customers to succeed, so being active there as well. We are fostering our globally growing loyal customer base with strong customer relationship management. We have a strong, loyal customer base, which is a strength here as well. We are benefiting from the lifestyle assortment, which is featuring wide, desirable opening price points for people who have less money to spend. I would like to also mention that we have outlets, we have second cycle, our Pre-loved marketplace as entry points for the brand. We did, during the pandemic, do lots of learnings, and we learned to act more agile than earlier.
We will continue doing those learnings, but of course, when needed, taking new learnings on. We will do those learnings across the value chain, including active management of supply chain disruptions, product flows, and inventories, as well as mitigating the generally increased material and logistics prices. This, combined with the smart fixed cost spending and continuous operational efficiency development. We think that the best hedge when operating in a possible downturn is actually the strong, desirable brand which we have been able to develop during the past years, combined with the commercial excellence and agility. That's the trick which will do it. Thank you. Now I would like to invite Tiina over here. Yes.
Thank you, Elina. It's starting to be the time to wrap up and recap the day. Basically, in a nutshell, given our new direction for our strategy for the years 2023 to 2027, why invest in Marimekko? Why to be part of this journey? First of all, with Marimekko, we have an attractive opportunity to scale the profitable growth of the global brand with low risk and CapEx. What does this mean? First and foremost, we have a global lifestyle brand with recognizable prints and a strong value-based story. As many of my colleagues during the course of the past hours have elaborated, there's no one in the world who can do art of printmaking better in the world than we do.
At the same time, there's no other brand in the world who can own the optimism and the joy to everyday life in the way that we do in an inclusive manner. Second of all, we have a proven success recipe for profitable growth that we have showcased also in the past, with a history of and target of stable returns. Third, there is an attractive opportunity to now use this success recipe and further reinforce it and scale globally, especially in Asia, supported by these mega trends. Fourth, we are a brand that builds emotional connection, and therefore, we can scale up the Marimekko phenomenon and growth together with our customers. This is, of course, something that is highly supported also by the top-level global brand collaborations that we aim to continue.
Last but not least is, of course, the scalability of our business model, which has low risk and CapEx needs. With these words, I believe that we're starting to be ready for the questions. Anna, if you can join us on the stage.
Thank you, Tiina. Before we open up the questions, just a few practicalities. We'll be taking questions both online and here at the printing factory. For the online questions, please use the chat function. Here in place, if you have a question, please raise your hand and wait for a microphone. To make sure that we have time to take questions from as many of you as possible, we hope that you can limit your questions at a time to two questions and maybe then ask follow-up questions if needed. I was thinking we already have some online questions, so maybe we'll start with a couple of those. First of all, the share of Finland has traditionally represented around half of Marimekko's net sales.
Looking now in the future, what will be the key recipe for Marimekko to speed up and scale the international growth?
As discussed over the course of the last hours, the kind of key theme in the new strategy period for us is all about further building on and reinforcing the proven success recipe to scale up our growth. What is really key in that is to continue the building of our international awareness and the continuing to build the desirability of and the relevance of our collections and products. Of course, also to further cement the key city ecosystem around the world that also Heidi elaborated on earlier today.
When it comes to the growth drivers, to really kind of speed up the international growth, which is the key theme in the scale strategy, we will be continuing the growth in the DTC channels, speeding up digital commerce, the overall omni-channel retail operated by us, but also by our partners, especially then in Asia. We will be exploring completely new market areas in Asia, and then we will be expanding our reach and actually scaling up also via both online and physical wholesale retailers. I would say that these form the kind of the key recipe for the international growth in the future.
During the presentation, we discussed some investments that are needed, but overall, how do you see the investments this growth will require?
Well, it's good to remember that when we look at the past five years, we've already kind of showcased how we've been able to grow and at the same time actually grow our profitability even more through the operational leverage. Of course, the kind of scaling up also requires investments. In addition to the investments we're doing to increase the desirability and relevance of our collections and products, of course, we will be continuing our investments in marketing and brand awareness to acquire new customers. We will be further continuing the development of our digital and omni-channel business and customer experience, and we will be, of course, doing investments on sustainability and overall end-to-end digitality to further boost our competitiveness. Of course, it's then good to keep in mind again the business model impact.
As we've stated, the key geographical area for our future international growth is Asia, where we operate through this loose franchise business model, where actually the CapEx and the OpEx is done by the partners. This means that there is limited kind of risk and also investment needs from Marimekko as a company.
A few questions related to the U.S. market. In one of the presentations, you mentioned New York as a global key city, but I understand that the flagship there was closed. Will you be opening a new flagship in New York?
As stated, North America represents also in the future one of our key market areas, and New York plays a role as a key global city. We know that when we are successful in New York, the impacts of that actually echo also, for example, in some of the key cities in Asia. It plays a really important role also for us going into future. The lease of the previous New York flagship store was a 10-year-long one, and it expired at the turn of the year. At the moment, we're working to finalize the new store location lease in New York. More information about that when we get to it, but really important role also in the future.
There's also a question about the U.S. markets in general, the importance of that market.
Yes. As mentioned, it continues to be one of our main markets and maybe still going back to New York. Of course, the pandemic hit the US, but also New York very hard, and we also took the opportunity of the ending of the lease now to reevaluate what would be the right location for our future flagship in that important key global city. At the same time as the kind of the physical heart of the brand culture will be in the flagship store in New York, we're continuously putting further investments into our digital commerce and also opening up new wholesale key customer accounts. Sanna-Kaisa earlier today was also elaborating and opening up the kind of partnership thinking with key wholesale accounts, and that is exactly the approach that we're intending to take.
A good example of that type of approach is actually from last year when we did some pop-in concepts all around the U.S. or North America with Nordstrom to celebrate the Marimekko seventieth anniversary.
Yeah. Okay. Let's take some of the questions here at the room.
Yes. Thank you. Maria Wikström from SEB. The question once again a little bit on your new sales target, which you raised from 10% to 15%, and knowing that Finland represents a bit more than a half of your revenues. If you would think that, I mean, Finland is quite mature market and that would only grow, let's say 5%, I mean, this means, I mean, much more than 20% growth for the international markets. As you said, you have the loose franchise model, but what makes you so confident that you can actually go grow such a high figures in the foreign markets in the current economic uncertainty?
Yes. I think that it goes back to the core of the scale strategy. When we think about the core of that, I mean, the whole intention is to scale up Marimekko's growth, especially in the international markets. As Elina explained, we're actually targeting growth across all our market areas. Also in Finland, our objective is to actually gain more market share. If we see Finland as a market that can sort of help us fuel the international growth, the good performance here allows us to further invest and accelerate the growth in the other markets. It's also good to remember that in the last couple of years, there has been the pandemic, and there have been lockdowns.
You know, we already reached over 10% net sales growth in 2019, right before the pandemic came. Then, you know, in 2021, we well over 20% grew our net sales, and we were, like, really back on track on the growth. I think that the target setting really demonstrates our ambition, and we are very confident on our ability to now start scaling up and kind of really reinforce this proven success recipe. It's clear that when we have a very strong position in the domestic market, that the kind of results of our continued long-term work to modernize the brand and the collection start to be more visible here first because here we have that strong position to start kind of bouncing from.
Already now, when we look at also the kind of global brand collaborations, we can see a constantly growing global interest in our brand. We believe that by focusing on these five key strategic success factors, we're able to together untap further growth in the international market.
If I may, thank you very much for my second question, which is about the EBIT margin target of 20% and getting a little bit of an idea about how you look at it, I mean, through the strategy period, that if we now enter into an economic downturn, are you willing to take a lower margin for a certain time during the strategy period, or will you introduce some cost-cutting measures in order to get the profitability up?
Maybe if we kind of start from the big picture that in the last couple of years, we've also experienced the pandemic, and that has been the deepest, like, the worst crisis experienced in the global fashion industry in decades. Despite the pandemic, Marimekko actually pushed forward, and we were able to further improve our financial performance. I think that Elina was also discussing earlier on the kind of speedy learnings that we took and the new more agile operating methods that we have been adopting during the last couple of years that have been kind of further supporting us in the adaptation of our business to do new, even volatile circumstances. That has been one of the key success factors also in the past couple of years.
If we imagine the scenario of a more recession-like environment, I think that we are well-equipped with our learnings from the pandemic together with the stronger than ever brand and the collection and all the other aspects that Elina listed earlier on. When it comes to the long-term financial targets, of course, they are, as they say, the long-term financial targets. We're here to develop Marimekko in a long-term sustainable way, and I think that also our past performance show that we're able to do that.
Is there another question?
Tommy Ilmoni from Carnegie. Every now and then you had these large promotional wholesale deliveries in Finland. What's the strategy behind them? How often do you do them? Are they just occasional when you see there's a good opportunity to go ahead with them? Thank you.
Thank you for the question. If you look back to our kind of annual reports and interim reports for many, many years backwards, you will see that these are part of our regular business. In some years, the non-recurring promotional deliveries in wholesale in Finland are bigger, and in some years, they are a little bit smaller. For example, this year, while we've been guiding also net sales growth, we have also stated that while in Finland we do expect our net sales to grow, the non-recurring promotional deliveries in wholesale will be substantially smaller than in the last year when they were very big. These promotions are a regular part of our business, but they vary on a year-to-year level.
These campaigns also allow us the possibility to access the wider audience, and this way support our growth strategy.
Is this something you could do outside Finland as well, or is it only tied to this local market?
Well, we're very passionate about scaling up Marimekko, so we of course study carefully different kinds of new business opportunities or business model opportunities that allow us to do that also in the other markets. Of course, always in a way that builds our brand equity and desirability. This is really the key to unleash the further international growth.
Yeah. Now it's on. Rauli Juva from Inderes. Hello. Following up on Maria's question, basically, did I understand your question right that, given the margin target is long-term 20%, you are basically willing to sacrifice some of that in the short term to drive the 15% growth you are looking annually according to the targets?
I think what Elina also said earlier on, we of course, just like in the past years, just like today, we constantly monitor the situation when it comes to the general economic trend, the consumer purchasing power, consumer confidence, of course, the pandemic situation, the war in Ukraine. This is part of our regular work. Then if there is a need, then we adapt our business to a new situation. I think I can say that we feel pretty confident in sort of encountering any possible future, like, possible new challenges in the operating environments, having also experienced and mitigated the pandemic, which was quite an extreme, extraneous circumstance in a successful manner. The long-term targets are, of course, long-term financial targets.
I think that already now we have developed our business to a very strong profitability level also in the context of our industry. I think that that also gives us a good starting point now to continue to this new strategic cycle and continue the growth and accelerate the growth of Marimekko internationally.
Good. Thank you. Turning it a bit upside down to the same question. If you are able to achieve the 15% annual growth for 5 years, your sales will be pretty significantly up. As you say and agree that you have pretty strong operational leverage, why should the margin be only 20% where you have been already?
The question was, sorry.
Why the margin should be only 20% when you have been already if you are able to double the sales from here and you have a good operational leverage?
Yes. Well, we believe in building the Marimekko story in a sustainable manner. Of course, scaling up requires investments into the brand awareness, investments into continuous investments to our customer experience, digital business, digital scaling, sustainability, which we believe that are actually key anchors in unleashing that growth. We feel that our long-term financial targets of 15% annual net sales growth and 20% EBIT margins give us a kind of good, solid target setting for the long-term future.
Thanks. James Ogilvy from Lazard. I've got my two questions as well. The first one, I think Japan demonstrates how important the local partner is, the identity of the local partner and their capacity. I wonder if you could tell us a bit more about who the partner is in China, what their capacity is, what sort of footprint for stores they're targeting.
Sure.
If any more about them, because it's
Yes. Happy to do so. When we look at the kind of Asian market today, we have selected carefully our partners, not only for Japan, but actually by getting inspired by our success there, we have followed a similar kind of approach also in the go-to-market strategies to the other Asian markets. Some 10 years ago, a little less than 10 years ago, we started the journey in China, and we actually opened the first stores together with our partner for Hong Kong and China from Hong Kong, and then started to roll out in Shanghai, Beijing. Today, we have also stores in Shenzhen, and actually many other cities already.
When we look at the current footprint of Marimekko in Greater China, we have somewhat less than 20 stores, and I think that this is really the key to it. The market size is so large. At the same time, it's a market that is growing, so there is a tremendous opportunity to speed up growth also in the future, not only through the store network expansion, but actually via the digital business. The same actually goes to some of the other markets where we are already involved. Thailand, that's a success story that we have been building together with our partner, Tanachira, for the last seven years. There are, of course, opportunities also in the other Southeast Asia markets. We also have a presence in South Korea.
South Korea is known as one of the kind of design hubs in Asia, where also digital plays a really important role in the business and we have a very good relationship with the Korean partner to really kind of exchange the best practices in our digital operations to share with their teams and vice versa. Today, of course, the largest number of physical stores in Asia is in Japan, where we have the longest history of 17 years working together with Look and Mitsubishi as our exclusive distributors and the kind of total share of the other Asian market is still smaller, but constantly growing and I think this is really where we see the big opportunity now going into the future.
Basically you're saying that the number of stores isn't necessarily the right yardstick for measuring progress, and maybe the mix will be totally different in China.
Yeah. Omni-channel sales, that is the key. In, you know, when we go like if we think back of our approach in the internationalization strategy, it's all about these key city ecosystems. We always take the kind of customer boots, put the customer boots on in each of our key cities and identify the key channels where we need to be present and their respective roles for that target customer in that key city. For example, in Tokyo, it means that we have probably well over 10 physical stores in the Greater Tokyo Area, but then we also have an online store. We have presence in the key wholesale accounts like the kind of most renowned department stores like Isetan and so forth.
Whereas then in Shanghai, the role of department store is actually not so important. There we actually have then physical stores in the leading malls, and then we pair that up with the business in the Tmall and also aim to further sort of enrich our digital touchpoints in the market to further fuel the whole ecosystem growth. It's all about this key city ecosystem thinking and being very sharp and extremely end customer knowledgeable and oriented to achieve the biggest impact.
Sorry, I had one more. This is a bit of a boring balance sheet question. You kept the leverage target the same, and it's pretty redundant almost at the moment because especially if you achieve the growth in revenues and the margin you're giving, so there's gonna be an awful lot of cash sitting around in five years' time, and I don't really see what you can do with it. I mean, what's your thinking on that? Is there a reason why you just left it unchanged, and we'll think about it later?
I think it's more about being like continuity is the key here. If we look at then, of course, the past, I mean, how much we have actually paid dividend out, we have often actually paid more than the maximum 50%, but we want it to be constant with the past.
Also, if you look into the past, we have from time to time also paid out these sort of extraordinary dividends as well.
If I-
Question, online, here in the middle. Brand protection, especially when internationalization is quite important. There are copycats everywhere. How would you describe the current situation of protecting the Marimekko brand?
We would have our general counsel here, Essi Weseri, to elaborate more in detail on the kind of IPR aspects. I would say, overall, when the brand increases in international kind of relevance, and when there's growing interest in a brand internationally, of course, the unfortunate reality is that there might be more copycats. One could also say, if we look at it from the bright side of point of view, that you're never copied if you're not interesting. Of course, for us, IPR is one of our key assets, and therefore, we take all the measures, and we have very rigid processes to protect our IPR. If we ever find out about possible copycats or copy issues, we always address them immediately.
I think we take very much pride in this systematic way of working and in protecting our IPR. Yeah. Thanks. Back to the floor.
Thanks. One more question on the sustainability and especially on the new materials. Like, I mean, now you're using these Spinnova in one of your collections. What is currently the kind of like or is there an obstacle of scaling the business when it comes to, like, availability of the materials? Then I mean, that's like a lot of these materials comes from one single factory, so thinking about that, I mean, can you really rely if there is only, like, one factory producing the material? Maybe putting a little bit concrete that how much could these products be from total sales in five years' time, 10 years' time, to get a little bit of grip that.
I think that the main kind of point here is that when it comes to the sustainability transformation in materials, it's a very wide-ranging and holistic approach. We're not looking for, like, individual type of, kind of, solutions for new, more sustainable materials. We are taking a very wide-ranging view. We're looking at, you know, organic materials, recycled materials, upcycled materials, new material innovations, bio-based materials, leather alternatives. It's a very holistic, rigorous transformation program that we actually have in place, that we progress sort of every season and every collection at a time. Of course, when you mentioned Spinnova, of course, you know, as Riika very well mentioned, we just launched the first two pieces of commercial product that have been made using Spinnova's fiber to the market.
It's in the very early stages, but it's very important for us to be there promoting some of these new, more sustainable material innovations. In this way, also test the market. This is just one example of the very big other portfolio of more sustainable material and the related transformation.
If I may, one more on this was on the digitalization. Because I think I hear from your presentation that, I mean, you, if you, I mean, maybe you're still, like, considered as a lifestyle brand, but I think you wanna a little bit promote the actual fashion content. Does this change your view that how you view your, like, own online retail and then, like, being retailed at these, like, partners, we talk about Boozt or Zalando, if you wanna, like, increase the actual fashion content in your products?
Already, actually, in the last years, our strategy has been to spearhead the Marimekko lifestyle with ready-to-wear. Actually, that has not changed. What we're now doing is we're just, like, pushing on the pedals and really kind of leveling up what that means in terms of becoming this sort of forerunner in the new luxury that Rebekka was discussing about. For us, we actually see that this new luxury is all about kind of bringing this more kind of sustainable, more timeless, more inclusive, product and offering that celebrates the art of printmaking. With that, when it, or how that then connects with the distribution strategy, we want to utilize the vehicles that give us access to the wider customer audience.
When it comes to the Boozt and Zalando, they do play a really important role for us to also acquaint new customer groups to our brand. Maybe this way, they can also get inspired and find our own channels, and this way, start deepening their relationship with Marimekko, and us building a longer-term loyalty with those customers.
Thank you.
We would have time for a few more questions.
Yes. Hi. Joonas Häyhä from OP Markets. Just one on cost inflation, basically. I understand some part of the inflation comes with delay, so could you perhaps talk a little bit about this theme and what part has been experienced already and what is to be seen in the future?
You're referring to the higher prices of materials, for example, and logistics. As we have said, this year we can see that the kind of general increase in material costs and logistics is, of course, impacting also us. As we follow at Marimekko the traditional fashion cycle in the development of our collections, it means that these sort of increased costs impact us with the delay. Having said that, at Marimekko, we're pretty good at mitigating things, as we have proven during the course of the pandemic. Of course, the kind of increased costs are something that we are actively mitigating throughout our value chain.
This year, we have said that this is definitely something that we can see as well impacting Marimekko, but we're actively mitigating this through other levers.
If there are no further questions, I think it's time to wrap up. Before I let Tiina say the final words, I would just like to remind you that if, after the event, you have anything you would like to further discuss, we at the IR team are happy to help you.
Yeah. Thank you, Anna. Of course, I would just like to end by saying that at Marimekko, we're super psyched about starting this new strategy period of scaling up the growth and the brand phenomenon of Marimekko, and we hope that you join us in this journey. I also want to thank you all for being here, present physically at the Marimekko House and our printing mill, and those of you who have joined us also through the online channels. Thank you for all the excellent questions.