Welcome to this Capital Market Day. That is the third one we arranged, I think. The first one we did was quite a lot of people. The second one, we moved to another facility because the room was too small, and then it was not so many. Now we have, I think, 20 in a queue to be here, so it changed fast. The program of today: you will meet several people from us. Tomas Jansson and Andreas will have a presentation about New Wave in Dingle, that are one of the biggest subsidiaries in Scandinavia and also a central warehouse. You will have a presentation from Torsten Jansson and Christopher Rehn. Then you will meet Anni, that's our CSR responsible. Then we have the lunch. Then after that, you will meet Tom van Heffen, that has been in New Wave quite many years.
He was responsible first for Harvest, Printer Active Wear, ProJob, in Belgium, and then he did that very well. So then he took over France as well two years ago, I think, and turned that profitable. And now we have taken over Germany also. So it's a very important player here. Craft International, Stefan, I think most of you have met before. Coffee Break. And then we have the newest, so to say, big football club we have signed, AGF Aarhus. You will meet their CEO and CCO. After that, we have a presentation that are on the net from New Wave's distribution in Canada, Mark Alexander. And then a short summary, and then some light food and gin and beer tasting from Kosta Bryggeri & Distillery. That's the schedule. Change financial targets, and new long-term financial goals.
Operating margin: we have been now for 2 years in a row overperformed the 15%, and we still have much more to do. So we want to raise that to 20%. Why we do it? As I said, we have overperformed our old goals several times. We have companies that are far over 20%, so we know this is possible to reach. So that's the first change. Second one is the equity ratio. Since we want to continue to grow by 10%-20% that has not changed, that has been the goal always. We want to have a strong balance sheet also when it's bad times. So we raised that from 30% to 40%. Practically, it doesn't mean anything because we are above 60%.
But it can be good to know for investors that we will keep an eye on the latest 40% to not have too high risks when we grow here. Growth targets remain 10%-20%, and 5%-10% is organic growth. This will, of course, be very different in different years. I mean, some years we do acquisitions, then we will probably go higher. I think it was 32% two years ago. Then if it's no acquisition, we will be in the lower end of it. So it will not be something that we deliver every year, so to say. It's an average we should reach this. Old goals are over a period of a business cycle.
You can say, right now, I'm happy, as I wrote in the Q4 report, for the sales we have now because it is a tough market, and I think it will continue to at least Q3. Sports retail will, I'm pretty sure, recover in Q3. That is because most of our clients, they were overstocked. Their goal has been to take down their own stock, which means that they haven't hardly bought anything from suppliers. I think we are doing it very, very well right now according to how the economy is. Now we should join for a short trip to Seattle. Here you can see we talk a lot about optimization and how we should reach those goals. We have 13 warehouses left to do. We have done 6 or 7 lots, and 2 are soon done.
But this is an order coming in to Cutter & Buck in Seattle. Some technician here, maybe? [Foreign Language] . And then I can just add, when you see this movie, if you go back in Seattle's case 2 years, or if you go back more than 5 years in our history, all this was done by hand. So you will see a big, big change in efficiency when we do this. Hold right close now. It will move it by itself. And you can already from the first step that if you go back in the past, most of the order was coming in by phone. Now it's more and more in internet and EDI.
And then after it came by phone, it was printed out on the paper, carried out to the warehouse, picked up by hand, then to the embroidery by hand, and so on. So it's an extremely big difference in efficiency when we have come through all companies in this. [Foreign Language] . OK. Any questions, or should I leave to the next one? Yes?
One question about this integration of the embroidery into your own business. I mean, previously or historically, I think you've said that you would like to handle as little as possible of this because you want the volume and the simplicity and have third parties handle this. Now it seems to have you changed a little bit your strategy?
A little bit, yes, because it has been less seasonal. The big problem in the past was that it was mainly screen printing. And screen printing was mainly done on light clothing, like T-shirts and so on. So you had an extreme peak for the production in Q2. And now when it's more methods like embroidery coming up, you have transfer printing and so on, it's easier to handle. So a little bit changed. But we don't have the goal to own everything. If we can have a solution that we have at Dingle, that we have an external company established into our warehouse, we think that is a very good alternative also.
I guess it's a higher profit margin, of course, if you have an embroidery on the item than if you just sell it to someone else placing that. But it's also a higher cost to handle it. So could you say something about the difference in operating margin per item?
It's actually not different because when we make the embroidery, we charge the garment at the same price as we do if we sell it in blank, and then we add on the cost for the embroidery.
The margin on that embroidery work that you are now looking to add more of?
Tomas, do you know that? What is it? What's that? You will have it later on. And Tomas and also Tom will talk a lot more about the segmentation and logistics and so on. OK, thank you for the yeah, sorry.
Is it OK to ask a question about the financial targets?
Yes.
Yes. Could you give us some of the ideas of the building block to get from the current 67% margin down to 20%?
First of all, we still have companies underperforming, even in Sweden, and there we have to do changes. Second of all, we have 13, I think I said before, I think it's 13 warehouses left to automate. It's a huge difference in profitability between the ones that have already done that and the ones that haven't done it. Also, when we grow, we think we can have better and better buying prices as long as we grow with existing brands and existing products. You have some parts that are, I would say, still not profitable, but we believe very hard in the future, like Craft running shoes that still counts as a new project with quite bad gross margins and so on. It's a mix of different and quite many fixes. It's not one quick fix. OK, I welcome Tomas and Andreas.
Thank you very much.
[Foreign Language] Very welcome. My name is Tomas Jansson, and I'm the managing director for New Wave Mode AB. I will talk about New Wave Mode's performance and market strengths, and I will also talk a little bit about the promotional market, basic and reflections. Andreas Johansson, supply chain manager, will talk about internal processes and so on. And of course, it's very important to have a high EBIT. We have to have internal efficiency. I think we start. [Foreign Language] .
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OK, what is a promotional item? A promotional item can be more or less anything. But it's a product made with a primary purpose of being branded and used in a commercial context, like worn, like workwear, given as a giveaway or business gift, or sold as merchandise. If we look into the size of the market, PSI, the Promotional Product Service Institute in Germany, conducted a survey over the market in 2019. This is the top 10 countries in Europe. The big four are Germany, U.K., France, and Italy. They made the study by interviews to end customers. And in that way, they estimated the size of the market. Another study made by the American Institute, ASI, also conducted a study over the same countries. But they did it in a little other way.
They compared gross national product per capita, advertising spending per capita, and the number of small and medium-sized companies in the countries assessed. If we look into the Swedish market, IRM, Institutet för Reklam- och Mediestatistik, this is the total spending of marketing in Sweden in 2022, and it's SEK 88.4 billion. The share of product media is 8.6% or SEK 7.6 million. The market share, the share of promotional media has been very stable, always around 8%. It's a strong correlation between GNP and growth in marketing. We have looked back and, for example, during the financial crisis, the GNP dropped with 4% and the marketing expenditure dropped with 11%. It was the same with corona. But if the GNP is positive, the market expenditure increases. I think this year it will be a little increasement also in Sweden for GNP.
Some parts of the market are not sensitive to economic conditions, such as grocery stores, health care, public sectors, different events, and concerts, and so on. There is always a stable supply. As you can see, it's an inconsistency between the PSI and ASI figure for the market estimation compared to the Swedish. The difference is almost 60%. My personal opinion is that the IRM figure is the right figure because we have also done a lot of own investigations regarding the market size. This could also be valid for other European countries, I think.
Excuse me, was that the IRM?
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OK, OK, that's one.
[Foreign Language] . OK, New Wave Mode. We have two main business areas. We have the corporate area where we sell promowear, the brands like Clique, Cutter & Buck. We do some special design. We also sell Toppoint products. Then we have the retail business. We sell to sport chains. Then we have one part, the central warehouse that serves New Wave Mode, but also to other New Wave Group companies like ProJob and DJ Frantextil. Andreas will explain that later on. Through New Wave Group, we have high buying power. But we also try to increase our pricing power on the market. One way is to offer our clients high-end brands with good quality, like Cutter & Buck.
That means that we can have a decent margin and our customers can have a decent margin. Regarding basics, replaceable, so to say, T-shirts and simple pull-up kits and so on, you have to deliver an exceptional service to create pricing power. Healthy stock, lots of sizes, many colors, prompt deliveries, and so on. Some examples of New Wave brands that have high pricing power are Harvest & Frost, Clique on the promo side, Tenson, outdoor, Cutter & Buck, and Craft. Cutter & Buck is our premium brand and, after several years as an official partner to the Swedish Golf Association, we are now stepping up and taking over the title sponsorship for the men's professional tour. It's a four-year contract. I think it will increase the brand awareness and the sales a lot. If we look into our market shares in the Nordic countries, this is for Promoware.
We can see we are the market leader in Sweden, Norway, and Finland. We have a market share of 28% in Sweden, 21% in Norway, and 22% in Finland. In Denmark, it's the market leader Rexholm. They hold around 30% of the market. In Finland, it's multi-brand wholesalers that are number two and number three, like SkyPro and Mercantus. And in Norway, it's two domestic companies called Nordisk Handelshus and Handelskompaniet. But we have a very strong position in Sweden. And we have measured this before, but we have increased our market shares since 2010. So we have a strong. Any questions? Is it clear? Det har vi pratat om. If we look at the Swedish market, it's very fragmented. And we think that it's almost 3,000 resellers. 1,500 of them have it as main business, Promoware and promotional item. And 1,500 have it as additional business.
It could be, for example, Staples or Intersport or so on. Most of the Swedish companies are small companies. The end consumers, 96%, have less than 10 employees. That means that a lot of business is local and not centralized. So we have to have good coverage with clients all over the area. We also have a lot of competitors. If we see how many suppliers we have a Swedish fair, Promo Fair, and during the years, it's over 700 different suppliers who have paid attention to the fair. So it's a very high number. The average client has 100-200 suppliers. We have all the international suppliers: Falk & Ross, B&C, Lynka, L-Shop, and so on. All of them are active in Sweden. We also have big competition from Denmark, especially three companies: Rexholm, Tee Jays, and Neutral. Then we have a lot of domestic suppliers.
For example, Fruit Distribution, they sell for about SEK 100 million. And Båstadgruppen, it's a little bit tricky nowadays to calculate their turnover because they made a lot of acquisitions. They bought Sandryds and they bought Top Swede and so on. Pardon? But that is including shoes and gloves and monitors and so on. So we have estimated promo sales to SEK 150 million. Det tror jag. OK, the biggest, if we look into the retailers, Alligo Group is the biggest one now. They have acquired promotional companies. I think it's eight or nine. And their target is to reach SEK 800 million in turnover in that area until 2025. But we can see that Alligo also had a rather tough year. The organic growth, I think it was -7.5%. But they raised the EBIT margin, so it was well done.
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OK. One way to handle or act in a fragmented market is that we have a unique marketing concept. In Sweden, we have 68 members. It's a self-driven entrepreneur business with local knowledge that we produce central marketing for. We also have members in Finland, Norway, and Denmark. So altogether, it's 160. We speak with one voice towards the market. Our performance since 2013, we have had good growth until 2019. Then we had a small drop during corona. Then we are back on track again. Our EBIT is always higher than the group target. Yes.
Hi, my name is Andreas, as I said.
I'm going to talk a little bit about service and logistics and what we do in Dingle, but also in New Wave Mode. What we try to do is that we try to create a long and lasting relationship with our customers, making it easy as well as beneficial to work with us as a service company. We have good stock level. We have an accessible sales force, which is close to our clients. We have still, even though Torsten said it's getting more into digital, we have a very helpful and involved customer service so the customer can choose what they want to, how they want to approach us. Of course, we try to make quick and reliable deliveries so that the clients can feel secure. We always try and listen and also adopt our way of working towards their customers' needs.
When it comes to producing our services, we talk often about a reasonable cost, not always the lowest cost, because what we've seen is that that often affects our services. We always strive to have a reasonable cost, which gets us involved in the deal together with the clients. We have three companies. Of course, we have some economies of scale in Dingle, some fixed costs that we can share. We also have the possibility to balance our resources during the year. For example, Promaware and Workware are very heavy in spring, summer, autumn, while we have one company that is very hard on Christmas and also gift cards in January. We can balance our resources quite well, which is a benefit for us. We always try to find a good blend of automation, digitalization, and the human touch.
I've been working a long time in logistics, so I love the automation. But what's special in New Wave Mode is that we always need to mix it with the human touch of the clients. And, of course, being a central stock gives us both the responsibility within New Wave Group, but it also gives us benefits towards our biggest competitors in Europe, for example. Ja, Tomas, du kan ta nästa. And we talked about the full service concept a little bit earlier. Of course, compared to a traditional setup, we have the benefit of having everything under one roof. We have an efficient goods flow, keeping stock on hand close to production, gives us security in the deliveries. And it also saves us less work because if there is an error or something, we can fix it really quickly.
It gives us an economical benefit that we can give over to the clients as well. We have good quality goods, so we have a low percentage of cassation. We are close to the market. We listen to the customers, and we do, especially in this area, flexible solutions. We deliver both promo and retail. We also see now going into gift cards, we also scratch the surface of e-commerce, which is interesting for us as well. Yeah, of course, we can't go here and not talk about what we have planned for the future as well. We are in the really early stages of doing a local planning process together with the community so we can be ready for the new targets and then expansion within New Wave Group.
This is just a rough layout and first IDs, but we're in the early processes of this. Here is just one small example of how we try to combine digitalization and tech together with our manual work. We have good digital tools, both for our clients and the end customers, so they can order however they want. We have a good system where they can apply all the logos if they want to. But we also have our skilled staff so they can always help the clients, helping them take the step into digitalization. As Tomas said, it's a fragmented market with a lot of small companies that perhaps are often used to use the phone or not so digital out in all of Sweden, and we can give them both ways of working. We also have some automated restock possibilities in the system.
You, as a big client, don't need to refill your transfers, for example. You get an email that, "OK, this is ordered. Do you want it? Yes or no?" They don't have to think about it. This is just one example of how we try to combine everything into one big solution for the clients. Okay, the company culture. The most important thing is that we care about the people and the business. We are always curious, and we always seek possibilities to increase our knowledge. We think it's fundamental that we have good knowledge about the market. All of us are dedicated, and we always focus on things we can change, internal processes, and so on. If it's bad weather and so on, we can do nothing about it. To create real loyalty, we always try to do the little extra to the client.
That creates real loyalty. We have a lot of fun every day. Will you say something, Andreas, about it? I think you said it more or less. We have a lot of people that worked many years in Dingle, and we think that is also part of why they are staying so long. Torsten, have you communicated some new figures for vision turnover-wise? OK, but if you have done so, we think that our part of the vision will be that we can increase our turnover with SEK 200 million-SEK 300 million within 3-5 years. Because we have this application center, we will expand the warehouse. We have the organizational and financial muscles. Our market share is strong and increasing. We are on the right track, so to say. It's important for us to have good growth every year because it gives possibilities.
OK, any questions? Did you understand? It was a question before regarding gross margin and for application. If you, for example, take a heat transfer, a heat transfer, you print on the paper and then you transfer it by heat and pressure towards the garment. There it's an extremely high margin. It's 80% gross margin. If you look into the profitability, for example, for Hot Screen, you can see that they earn a lot of money. The total market for applications is always around 13% of selling of goods. So if the market is, so to say, SEK 10 million in Sweden, SEK 1.3 billion is applications. So application is a big market. There you can earn a lot of money. For embroidery, you can have like 50% gross margin.
It depends on the quality you deliver if you are a good embroiderer or you are a bad one. But it's pos sible to earn a lot of money.
So since the group average gross margin is a bit around 50, around there. Yeah, yeah. So since the group average gross margin is around 50 or slightly above 50%, it means that heat transfer.
Then if we take a big market share, it will increase. But yeah, yeah. No, I just understand that.
So this heat transfer would up, that application would up your gross margins on the group level. But the embroidery might not. Yeah, more or less. It's a service and a way to be more competitive.
For hardware products, it's always been so that the supplier sells the product with the print, for example, ball pens, writing instruments off.
But now it's more that way, that supplier always supplies the goods, garment, with applications. And it should be easy for the client: one-stop shop, one invoice, better cash flow, and so on. So we have to follow that development. Otherwise, it will go bad.
OK. Tomas, just a quick question on the reseller network. How healthy is it for the moment? Are they struggling in the current business cycle?
I think it's good because many of them raised their margin during COVID because they sell a lot to the healthcare sector. So they have a good profit. And then, yeah, it's good, actually, better than before. So the average EBIT 10 years ago was like 2%, 3%. Now it's 5%, 6% at least as a reseller.
OK, thank you very much.
[Foreign Language] . My name is Jens Petersson.
I'm the Senior Vice President for Sports and Leisure in the group. With me today, I have Christopher Rehn, who is newly appointed Deputy CEO of Tenson. We will take you on a Tenson journey in the next 30 minutes. Tenson, as you all know, is our latest acquisition in the group. It's quite exciting that we have finally found an acquisition in the outdoor market. We've been talking about it quite some time and looking for opportunities there. We think it's a great marketplace where we naturally can play as a company. New Wave Group, of course, will add primarily financial resources and infrastructure. We're quite impressed with the brand story of Tenson and also the product that the company offers. That will pretty much remain going forward. Why acquiring Tenson?
Well, first and foremost, we believe we have found a genuine and authentic outdoor brand with great products that we've been missing. With the New Wave Group platform and obviously also the global distribution network that we possess, we can really scale the brand and the business going forward and take it to the next level. From my point of view, heading up the sports and leisure area, it will add something really good into the mix where we already have Cutter & Buck & Craft. So we will definitely have a much stronger offering going forward. What's also very exciting is the fact that we see a great opportunity into the promo market or the promotional industry with Tenson. The road is pretty wide open. There's not really any competition out there that has entered into the promotional market in a serious way.
Other strong outdoor brands are not really accessible to the customers. We think we can be one of the first ones that really understands the corporate arena and at the same time coming with a genuine, well-known brand and making sure that we add the things that you need to add to be successful in the promotional industry. We think we also know quite well how to develop brands. I think we've proven that over and over with examples like Craft and Cutter & Buck. There's no reason why we can't do the same with Tenson. Finally, we have a great sourcing engine. And I think with that, we can really secure better pricing and hopefully better profitability, but also make sure that we remain at a very high quality standard and then at the same time adding better sustainability attributes as well.
So who are we as a brand? Sorry. OK. Well, Tenson was founded in Varberg, Sweden, in 1951 by a young entrepreneur named Paul Rydholm. Paul was an avid outdoors man. He started building products for himself and friends that they then took out into the nature and tested. He was also a bit ahead of his time when it comes to marketing and marketing communication. He also wanted to really sell the brand, not only the product. He said, "We're not only selling products, but we're really selling a dream of getting an experience out in the nature and feeling that you belong to a community." That is something that we still hold true today as well. Lagga lite här. The brand's vision is to inspire and enable a way of living where people live more active and adventurous in harmony with nature.
The mission: to design, develop, and market functional and stylish for all weather conditions apparel. Versatility, reliability, and function are cornerstones in our product design developments. So with that, I will hand over to Christopher, and he will take you further on this j ourney.
So my name is Christopher. I've been with the New Wave Group for 8 years, previously working for Craft. So I've experienced a similar journey, what we will do with Tenson, hopefully. And the brand where we are today, Jens told you about Paul and the start of Tenson. But what has also been a red thread throughout the history of Tenson has been their adventurous history, where we, with 5- to 10-year gaps, have made expeditions with explorers all over the world. What we're also doing is connecting the product development to this.
So, for example, in the left corner there, you will see the first edition of the Himalaya jacket, which is known as the Tenson jacket. Me being at Craft before, always people ask me, "OK, you're at Craft. I had a base layer for 10 years, and it's still functional." When I come to Tenson, everyone says, "I have a jacket for my dad or my grandfather in the basement that has been lasting for 30 years." So it's quite impressive. Quality is really something that we stand for. I believe this is a history that we will continue building. Already next year, we plan the next expedition with explorers around the world. Yeah. As Jens explained, Paul Rydholm was the founder of Tenson. His DNA is still living within the company and the brand. We are a very inclusive brand.
We are not that exclusive or elitist. We want to invite everyone to be a part of the community and the brand. So putting us on a map and comparing us to other outdoor brands out there today, we see that we are sort of a mid-priced brand, of course, upsold to the home brands of the retail chains, but also a bit below price-wise to other known brands. What we want to do now, of course, is to keep the price level because that's still the strategy. But we want to, of course, move the perception of Tenson and make sure that we are as well known as to each outdoor brand as the other brands that you can see up there. Another part of the brand, and which is quite natural being an outdoor brand, is sustainability.
I believe that every company in Sweden is talking about this in every presentation, and so are we. How we look at it is that we do these hydrogen factories. We are part of STICA, which is a Swedish textile initiative by the Swedish textile industry, collaborating with textile importers, also working with our CarbonZ ero to compensate and plant trees in the north, which is a chemical restriction list that we follow, of course, in the EU environment, and also, of course, taking care of the social compliance questions in the production. What we're doing outside of this, of course, is the most, I think, the most sustainability reason to buy Tenson is that its quality products are something you can use for a long time and nothing you use to use for a weekend and then throw out after this.
Also, of course, what we do now is to continue this work. And it's a lot about transparency and traceability to measure and to make sure that we make the right choices to have as little impact as possible on the nature now. So these are the three pillars that we are going to build the brand on: the heritage and the storytelling of the brand. Continue that. Of course, keep the idea and the identity of the brand. And then sustainability questions. If you look more into the business side of Tenson, we are now, as being a part of New Wave Group, naturally starting a new business area, which we call corporate. Promo is also the known name for it. Previously, Tenson used to work in retail and own e-commerce sites.
I think the first question when we entered the company six months ago was, "OK, are we going to do a promo collection now?" And this is something that we learned from the past from other brands, is that we're going to have one collection to sell through all these types of retailers and customers. Because at the end of the day, we want to make sure that the customers feel the quality and know the brand, recognize the brand from whatever area they're buying it from. And we believe that this customer, regardless if he's buying it from his company or getting it from an HR department or making the choice themselves to go into the e-com, it will be important to keep the same level. Oops, sorry. Collection-wise, Tenson are today existing of these four main categories.
We have the outdoor collection, which consists of two parts: Himalaya, which is a more traditional outdoor part. We have traditional colors such as beiges and browns and blacks. While TXlite is more colorful, more, let's say, innovative part where we have lightweight fabrics and stands for probably more of the summer collection. Lifestyle for us today, this is quite new to the, I would say, New Wave Group, being in a new type of distribution. We can go with fashion retailers instead, where we do something that we call function mix fashion then. Rain, quite self-explaining. Ski, which I believe is the most interesting part, especially looking into the corporate business area, because here we don't have any competition today. There's a lot of companies doing ski trips with their employees.
So we can already now see, just starting the business area, that this is what people are asking for, mainly from Tenson now. Tenson retail then. Here we have a quite good footprint in Europe. We want to continue this, of course, grow and expand, and especially with new accounts, new doors. We believe it's a numbers game. The more doors you have, the more you sell in the end. And how we operate there today is that we have two seasons: a spring, summer, and autumn, winter collection, which makes Tenson a 365 brand. We can cover the full year regardless of the season. If it's snowing, raining, windy, we have the clothes for you there.
Before New Wave Group and the history of Tenson, is that it's very strong in the Nordics, of course, but also have a quite good footprint in the Benelux areas, especially in the Netherlands market. So 32% was approximately the Benelux area. And you started the journey with the DACH area, which is the Germany, Switzerland, and Austria market. The challenge and probably why Tenson didn't have a very successful history in the recent history, was probably because you couldn't keep the segmentation. And this is something we've been working with a lot to really divide the different accounts into different tiers, to make sure that we sell the right product to the right account. Because otherwise, you create what we call a price gap, meaning that we sell a high-end jacket to maybe an outlet account, and then no one wants to buy the high-end jacket in the end.
So, of course, the natural part of doing a segmentation like this on the account level is also that you have to do it on a product level. So this is something that it's a sort of a confidence move. You have to make sure as a brand to really resist when the market is saying, "I want to buy that product to my, let's say, price point or discounted type of business model." But we are now doing this day by day, and we can really see that we are growing in the eyes of the customers then. Another part, being a part of the New Wave Group, is that we can have a totally new business model. As you know, the New Wave Group likes their stock and to build them.
Therefore, we can now have a new offer to the market where we can say we have an essentials collection, meaning that we have long-life products, color-wise long-life, product long-life, great quality so they can sustain over time, and we can sell them 365 days a year. The previous setup of Tenson was that you sell basically two times a year, but now we can actually sell all year around. Therefore, we also invested in new sales reps and a new organization internally so we can more or less sell every day to any customers out there. Looking to the distribution map, we added quite a few markets already now.
Of course, all the old connections in retail with other brands we have in the New Wave Group, but also new distributors such as in France, where we go, for example, in the Alps region and getting into really high-end outdoor and ski specialists, which in the end of the day will spread the word and hopefully make us grow all over the mid-Europe market. So the expansion is already happening right now. And Autumn 2024 just finished, and we can see a growth there already now, which is fantastic. Tenson corporate then. This is, as Jens mentioned already, for us, quite an easy way to take as New Wave Group, but also a big opportunity since there is not a lot of competition here.
We are quite bold saying that we will take the leading position already from day one, meaning 15th of January when we launched here in the showroom. The first question, of course, is why Tenson incorporate? We believe that we have this strong, genuine brand. Of course, there are other Swedish outdoor brands, but there is none with our unique history that we have, and we are very proud of it. Secondly, we have a unique corporate collection mix. We have different categories that we see that are lacking in this field, and especially with, let's say, a brand position. We also have the quality, of course, and the whole product and sustainability work that we will present in every meeting we go to a customer. Last but not least, the service level we can keep with New Wave and keep in stock.
We also believe that it's important for us to really take a position as the brand, the brand, meaning that we will also have to have the marketing material, not only digitally, which is natural for us, doing, of course, email marketing and promote ourselves through our e-com, but also the physical appearance. Shop-to-shop concept is something. It's quite an investment, but also for us, a way of building the brand. As the promo market is a bit more conservative compared to other markets, we see that this is really a way for us to be there and be present. Catalog, of course, is something that we do both digitally and physically, but it's still out there. You can see that the catalog that is on top of the pile is the one that's selling the most.
So we have to be out there and really present ourselves also physically in meetings and build relationships. Looking to the distribution map of corporate then, we launch now together with the Texet Benelux. You will hear from Tom van Heffen later, which are operating in the Benelux area, but also France and Germany. Of course, we launch in Sweden and also in Denmark and Finland with our two sister companies. The other markets we're adding for this autumn-winter already would be Norway, Austria, U.K., and Switzerland. So this is something totally new to Tenson. And already from day one, we have a lot of sales force, you can say, out there. And yeah, hopefully this will be a quick growth. And we can already see now that the customers have been really, really excited, and there's a lot of trust already from day one.
One, of course, being New Wave Group. Secondly, Tenson is a strong brand and has this rich history, which, yeah, they believe in too. Third and last leg of Tenson is the e-commerce. Here, this for us is an important tool to, of course, build a brand, because this is normally where our first encounter with a customer or a retailer or an end consumer in the end, but also an important tool then to build a brand. So why e-com and why we do is, and we have to defend this also to our retailers because they are also asking us and thinking that we are sort of stealing their business. But we believe that we're building the business for them.
Because if I wasn't known to Tenson, the first thing I would do is go into tenson.com and see what is Tenson and what is the price point and how they presented themselves. Secondly, we have a totally different reach. We can go all over Europe where we don't have distributors, agents, or sister companies today. And of course, we drive sales. And we are currently doing incredible numbers, both in terms of margin and also sales compared to the last year already. So when and the question then, how can we make that short impact? Yeah, we have been starting a lot with something we call performance marketing. And I like to, yeah, make the example out of an airplane where you have these engines that make it fly. First of all, paid ads. This is the more traditional way of doing it.
You're paying ads to like Google or Meta. Normally with a quite aggressive offer, you say, "Okay, now you can have 30% on ski jackets. Come into my site." This is something that we try to move away from more and more. This is not very good or sustainable long term for a brand like us. Secondly, and the biggest converter today is subscribers, where we have the newsletter sending out with offers and communicating on a weekly or a daily basis sometimes with our customers. Influencer marketing. And here we choose not to go for the biggest names here. We go for more of a micro-influencer strategy with 100 micro-influencers in the Swedish market this year, with a daily follow-up. So we have a person dedicated to follow this up every day. And we believe this will not only drive sales, but also, of course, drive the brand forward.
Affiliates is really interesting, I think, and a quite smart way of doing hidden offers to the market, EuroBonus or members' clubs, which they refer to themselves as publishers, making offers together with us. You don't have to lose that much margin in this deal. Also you can not disturb, let's say, the normal distribution. So this is what we believe is our success factors there. Again, where we're distributed with Tenson in e-com is all over Europe, excluding then the non-E.U. countries such as Norway, U.K., and Switzerland. I guess all of you are interested in this page. The financial goal for us is by 2026 to do a revenue or turnover of SEK 500 million. Then yearly we have a goal of doing 10% growth each year. That's a minimum then.
So just to summarize and sum up where we are, Tenson, again, the brand, it's really why the acquisition in the end of the day. It is a rich history and we have to nurture and continue that journey going forward. Design and quality, of course, the product is a lot of the DNA of the brand and also why we are perceived in the way we are. And the brand promise that we have is that we want to make affordable products, but great quality still. So we're going to continue in the same promise. Service, of course, to have the New Wave financial resources and also synergies with everything like IT and legal and a lot of knowledge centralized that we can use. You can tell already from day one that we have a great impact on Tenson as a brand.
Distribution, having three legs to stand on when it's hard. You can say coming from another brand I worked for before, you can say that this is the real strength of having three different legs to stand on. And we believe this is together with our sister companies, that we will make a fantastic journey and the brand will have a quite significant growth already in the coming two years. Sourcing. Tenson's challenge in the past has always been delivering in time and really to also get the right gross margin and not take a lot of upcharges on small quantities, etc. Now with the New Wave Sourcing, we can also see that we have increased our margins on a... Yeah, when we do the...
Yeah, when we do the spreadsheets, yeah, we can already see that we are increasing with 10%-15% margin already for this autumn-winter 2024 and SS25, which is the real first season that we can affect with the New Wave Sourcing. We are striving to go all the way down to 20% increase on the calculation level. All right. And I think that was it for us now. And feel free to ask any questions.
Yes, I have one question about the targets. They are, of course, aggressive. So that's great. But I think Torsten mentioned before SEK 500 million already in 2025. Is there something that you have realized when you have now come some time into this acquisition that makes you want to push this forward to 2026?
No, I believe that we are building for the future now and to be able to scale that fast.
Given that we are working mainly, our still our main income is from pre-orders that makes us already see in the future, so to speak, a year. We see that the pace of 2026 is what's more realistic for us. I think I can add to that that the corporate expansion is going to take a little bit longer time. That's natural because we need to... It's a three-pronged approach. I mean, we need to meet the customer. They need to meet their customer to sell in the products and the brand. So it's a little bit of a lag there. I think that's why we're going to need 2025 as well to really get the growth percentage that we expect from corporate.
So 200 this year, 300 2025 and 500 2026. Is that the best?
Something like that.
Yeah. Fine.
Good guess.
Then I had a more overall question regarding this business area and acquisitions. Haglöfs was recently divested as well. I guess it was actually sold at a lower valuation than what Asics acquired it, you know, 13 years ago or something. What was the reason you were not involved, as I understood it?
No, we were not, as far as I know, involved or looking at Haglöfs or offered Haglöfs at this time.
Okay. And then perhaps one for you, Jens, if you care to answer, but I think there's been a lot of, you know, reporting in the market about your divestment of your private stake and, yeah, if you would like to comment that in any way.
I don't really like to comment it, but I can say that I think Torsten said it right in Dagens Industri.
I've been with the company now for 25 years. These are, you know, stock options that I've had since 2001. So, I mean, you get to a point sometime where you kind of reshuffle, you know, and yeah, that's what I did. But I remain definitely with the group and there's no other hidden agenda here from my side.
Thank you. Just what do you think the sales split will be in 2026, from the retail and promo and the e-com segment?
No, we believe, I can tell today, it's about 20% of the turnover is coming from e-com. Corporate started in January, so it's basically zero. But we believe there will be, let's say, 60%, sorry, retail, like 30%, corporate and then 10% e-com, with decreasing in the comparison to the other ones, but not still an increase.
Could you maybe give us some flavor about the margin difference between the retail segment and the promo segment? Yeah, I mean, it's... Potentially at least.
It's, yeah, I mean, it's a quite big difference, to be honest. We are able to sell full-priced garments more or less always in corporate, while in retail, it's, as you know, a lot of campaign-driven and sales-driven. Oh, sorry. Yeah. So, yeah, but the actual numbers, I don't know if I'm allowed to display it or... No, I don't think we normally publish that, but I think that's a good answer. I mean, it's obviously... It's less competitive in corporate and there's definitely more competition and higher demands from the retailers on discounts, etc. Historically, corporate is always delivering a higher gross margin.
And just finally, you think you're well-staffed on the product development side or you can use maybe the from other sides of New Wave Group here?
I mean, we have a really strong team now. We've been working there for plus 25 years, some of them really know product know-how to create an, let's say, commercial assortment. So we believe that we're quite set right now, but of course we need to invest in new stuff as we go. And where we just hire a new person is, for example, when it comes to planning, which is important now where we're still building up our stock the way we do. So our product department, when it comes to development, is quite good, but then we have to have the functions around there that makes it more efficient.
Great. Thank you.
Thank you.
Can I just ask as well? I think you mentioned that where they went wrong was segmentation of the market.
Yep.
And at the same time, you said that you also want to move the perception of the brand. Are you implicitly saying that they also went wrong a little bit on the quality or do you sort of, do you need that, do you think you need to improve the quality to get the perception?
No, I don't think the quality is fantastic. So that was not the problem for them before. I think the problem was probably they went with the wrong accounts and used to give a clear explanation, a clear example.
Let's say an account as Gekås, for example, that you went with them too heavy with the more high-priced products that were meant when you developed them. You meant them to maybe put them to like an account like Alewalds or something here that were more of a specialist. But then due to the fact that they didn't get in there, they had to sort of downsize or downgrade the product to an unhealthy distribution for that product. So I think that's one problem. And then, of course, it's depending on where you are as in a financial situation, you have to make some panic decisions. And I think that was the case with Tenson too, that they had to go for deals that they weren't happy with and worsened long term, but they had to get the money in short term.
So that is another situation we are in now, which gives us more confidence and sort of a long-term strategy.
But does that mean that you sort of backed out of those accounts and you have to replace them with sales?
We don't want to back out of them. We just want to give them the right product. So it's more to give the right product to the right distributor or the right accountant. So yeah.
An outdoor brand such as Tenson, is it more or less sensitive comparing it to Craft or Cutter & Buck when promoting it to the corporate channel? I mean, some outdoor people are very anxious and could it be a risk?
Yeah, I think that is something that even being at Craft for many years, that was always the fear that how are the brand going to be perceived in another way, stepping more heavy into corporate. But again, we believe that it's the same consumer in the end. And even if you're an outdoor person, you can buy through your company or through an outdoor store. For us, I think that's a fear that which is not proven anyway. Quite the opposite, actually.
Yeah, and I think we learned from the Craft journey into corporate that we were fiddling a little bit with the product assortment and trying to flirt a little bit with corporate, which was totally wrong.
So what you need to do is really stay true to your brand, stay true to the product that you really can stand for and not deliver anything else into the corporate arena. And if you do that, whoever the receiver is in corporate will have the same experience and the same, yeah, feeling about the brand and the product as a normal consumer buying in a store or from the e-commerce. I think that's really the key.
All right. Great questions. Thank you, everyone. Yeah, very. Yeah. Thank you.
Good to get some new energy before the last section before lunch. So, my name is Anni Sandgren. I'm the CSR and Sustainability Manager for New Wave Group. I'm located in Gothenburg at the headquarters. And I'm basically working with all our different concepts and companies within the group.
So, I'm the one sitting in the middle with all the questions you can throw into the sustainability field. And I function a lot as a link between our companies and our sourcing offices. So, you know, they are a big part of our group strategy. And I'm somewhere in between them and our companies. Starting on a really overall level, I want to mention the UN Global Goals for Sustainable Development and how our work with sustainability is linked with these goals. Obviously, our ultimate goal is to maximize our contribution to these goals within our context. All these goals are interrelated, but for four of them, we consider we can make a more significant contribution. And this is first goal number eight: decent work and economic growth.
Here, we link our work with ensuring good working conditions, both in our own operations, but also especially in the global supply chains, where there are quite some challenges. Then we have goal number 12: responsible consumption and production. Here, we put the work with developing more sustainable products and worked in production processes, but also worked actively to spread the knowledge and information about sustainable consumption. A big part of my role is to be present with our different companies and also with clients to speak about responsible consumption, to increase the knowledge overall in these types of questions. Goal number 13: climate action. And here, we link the work with decreasing indirect emissions from, especially from production, production phase, but also from transportations by choosing more eco-friendly fuels and improved vessels.
But the prerequisite for all of these goals, and perhaps the most important one, is goal number 17: partnerships for the goals. So we are super dependent to work together with others, other brands within our different markets, and also different stakeholders around us for these goals and work together. Otherwise, we will not be able to make a significant impact if we're all running in 10 different ways. We need to run in one direction together. The work is packaged and communicated in our sustainability report. This really works as a framework for all our different companies and concepts on what they should prioritize with their respective work. It's very clear that the focus area is where we can make the most impact and also is highly valued by our stakeholders.
That is especially climate impact from products and in production, social responsibility in a global supply chain, and also reduced emissions, obviously, from both production and transportation. So this is something we have published every year together with the annual report. But right now, it's happening a lot in terms of reporting. We are preparing very much for the CSRD legislation. We will see already for this year's report quite some changes. But I think it's more work going on in the background to be prepared for 2024 reporting. But now, this week, we got some indications that it might be implemented one year later in Sweden. So we will see what happens with that. But we will continue to work to be ready for full CSRD reporting for the 2024 year. So that will include full Scope 1 - 3 emission reporting.
We have big internal discussions right now with the target setting and reductions plans. A lot is around information management and how we can implement and how we are implementing necessary system support to be able to manage all this information that is needed from different perspectives, both for reporting but also from customer demand around traceability, transparency, and so on. So a lot of work going on because of the legal frameworks that are shifting and changing. Yeah, I also want to add that overall, I mean, the big picture and the big analysis we have in place, we know where we must prioritize. But right now, it's really a question about also formalizing this. We are a big group. We have many big different concepts and different types of brands.
So, it's really finding our way to formulate that in a good way that covers the whole group. Some highlights from 2023 that we can just lift is we have been quite good throughout the group to develop more products with what we call sustainability attributes. For example, what we include in that is a product made of recycled polyester or organic cotton. It's a really clear shift towards these types of materials, also pushed from customer demands. We see that customers want this to a larger extent. As I mentioned, we are working a lot with the implementation of necessary system support for sustainability reporting, but also for how to calculate emissions and measure them. It's quite complex because also lacking of standards of how we should actually do it and what will be the requirements for these types of calculations.
But we're now in the mapping phase of the total emissions so that we will be able to formalize the targets in a more structured way. We are seeing really good improvements in the supply chain regarding social audits. What I refer to here is social audits done by third parties at our different manufacturing units. And we can see that they are really improving their grades. So we have a good coverage of these audits, but we can really see that they're also improving the grades overall, which is a good sign that it's going in the right direction out there. We have several good examples and initiatives from the different concepts for packaging, for plastics. And I mean, they're really good at coming up with different good initiatives right now. And this is a really classical one if you're talking about garments.
If your garment is very often packed in a single-pack poly bag to protect the garment during transportation. Then it's single use and then you throw it away. So now, instead of using these single-packed garments, whenever possible, we have multi-pack, for example, pack them together. They don't need to be single. If it's not a must to protect the garment, whenever possible, try to pack together. So that was just some examples of smart initiatives going out there. Also looking at our operations in offices and warehouses and so on, we see, as it's in general in society right now, a clear shift towards electrification of a company car fleet. So some highlights. There will come some more highlights when we publish the report together with the annual report.
So continue to the very core of this presentation and also where we have the biggest impact from a group perspective, namely the climate impact from products and production. First of all, all materials have advantages and disadvantages from a sustainability perspective. If you want to measure or consider the impact on humans and the environment, you must assess this from a lifecycle perspective. How big is the impact from the actual raw material to the production, transportation, and the user face? Very often, when we think about... and I talk a lot about the garments and the textile industry, we think about materials. And we really often get stuck in the material questions. So which material is better than the other? But I mean, all materials have advantages and disadvantages to be able to compare. You must lift it up on a lifecycle perspective.
To go through this example because actually the fact is that 80% of garments' climate impact comes from the production phase. Now, Jonas, you're in my presentation as well. Yeah. So 80% is in the production phase. And as you can see, as a comparison, 80% in production, then you have 3% in distribution and retail, which is actually the long distance transportation. Quite often, when you talk about emissions, you think about transportations and so on. And yes, of course, it must have a huge impact. And it does have some impact. But compared to where the big pie is, it's relatively small. The use of transportation phase, it's a bit higher. It's these single transportations, like one person taking one car, going and buying the product. So it gives you a little bit more. And then the user phase and end-of-life phase. But most significant, the production phase.
And if you divide the production phase and see how it's split, you have the fiber production here. It's 16%. So yes, significant and important to work with materials, definitely. But still, it's only 16% of the total impact. So this gives us the point out the importance that we work with the whole pie and not just with one part. And this is mainly driven because of the use of fossil fuels in these processes. So what type of energy is used in these different facilities that are doing the yarn production, fabric production? And what also really stands out is the wet treatment in the fabric production phase, meaning that what is called Tier Two is normally what you call the fabric mills and that part of the production chain. They basically have the biggest share of the impact.
So for us, then it's really important to work with the energy question. Of course, work with CMT. It stands for cut, make, and trim. So the sewing section. So definitely important to work with the sewing section, which are Tier Ones, normally like the direct business partners. But also really, really important to work with the fabrics. And we have a good advantage because we work a lot with nominated fabrics. So we also have a lot of direct business relationships with these fabric mills, which is a really good advantage when working with emission reductions onwards. And this is what research says. No. Locked. Seems like the presentation is locked somehow. Huh? So this is what the research says. What's the most important things from a climate impact perspective? The most important thing we can do as individuals and being... to help us along the way.
Prolonging the active lifetime of garment by 2. That is using the garments in its intended form twice as many times as the average. It will decrease the climate impact by almost half, almost 50%. So doubling the use phase half impact. So for this, it obviously means comes down to a quality question. Producing garments of high quality or durable quality. And also down to a discussion about demand and function that we offer our clients the correct product for the correct occasion, so to speak. So the product is actually used. So a big part of need analysis in client discussions to see, okay, so what's the desired function? And then you go from there when choosing what type of product to suggest in these specific cases. Adding to this, prolonging the lifetime by 2 and then also producing the garments using solar-powered energy or renewable energies.
It will mean a reduction by 67%. Pointing out is really important that we work with the energy question along the value chain. Also adding to the equation and consumer that bikes or walks to the store instead of taking these cars means a total impact decrease by 78%. So it's quite clear we're in this boat together. It's really a system change that is needed in terms of talking from a textile industry in a big picture. So what does this mean for us then? What are we doing? Well, to summarize once again, the greatest impact, of course, in the production is largely due to the use of fossil fuels. So to get there and to work with the improvements, we really must work together with our business partners and engage in partnerships and collaborations. We work with a framework called Amfori BEPI.
Amfori is also the network we're in for the social monitoring program. I will come to that later. But they also have one part for the environmental assessments. So this is something which is also really good because we are already working with Amfori for the social part. Now we're adding the other part of Amfori for the environmental assessments and can align that in the same platforms. So right now, it's a lot about measuring within this framework and also including it in all the discussions with our suppliers to increase the awareness, to try to see whenever it's possible for them and what's hindering them for renewable energy and so on. So right now, it's really a work of implementing it in our policies, in our discussions, and trying to find ways together with our suppliers for switching to renewables.
Could also be quite different depending on which country you're in. Different countries have different prerequisites for switching to renewables. If you take, for example, Bangladesh, where you have the factories are really often quite small on the area, but really, really high. So then it doesn't really make sense to set just a couple of solar panels on the top to try to serve seven buildings of production floors. So that's not really makes sense. If you compare, for example, to India, where we have very often we have really flat and wide factories. So it's a great opportunity for solar panels and the payoff is really quick. So there you already have a lot of solar panels to a large extent. So it's really about discovering the challenges and opportunities, also country-based, to drive that development.
We also see a lot of requirements is also coming from different governments around. I see a huge development in both China and Bangladesh for higher requirements as well to include renewables in the energy mix, which will have a direct impact on our total emissions as well since it's counted as our indirect emissions. Yes. So in this work for reduced climate impact, our purchasing offices really play a key role. We have our own offices in China, in Bangladesh, India, Vietnam, and also newly opened in Egypt. Having this direct relationship with suppliers and not only the Tier One, but also to a large extent the Tier Two fabric mill suppliers really gives us the opportunity to be close and have that type of dialogues instead of acting through agents and being further away from the actual production.
So, examples of work together with our suppliers could be one part, of course, the materials quality, product development part, use of renewable energy in production, as I mentioned. Also, requirements on water management. Progressive work of chemicals is a big area when talking about textiles and other products. We also have the advantage, given our group structure, that we have the opportunity to coordinate so-called big buys for several concepts, meaning that we have the opportunity to buy higher volumes of fabrics with different types of sustainability attributes. For example, recycled polyester. And we can buy a big batch and then the different concepts can share that buy, meaning that more of a concept can have more products with these types of materials, but still to a competitive price. So that's really an advantage from material discussion perspective as well. Yes.
Let's go into the social part a bit as well. How we work with social responsibility in the global supply chain. Once again, I want to point out our sourcing offices. They are really important in this work. One of our biggest strengths is that we have our own CSR staff located in the offices visiting the factories. And I mean, sharing language, culture really opens up for building trust with the suppliers. And so they have trust in us to also share their problems and have these types of discussions. And in addition to our own CSR staff, we have our own QC controllers, which is quality controllers. And they are more frequent out in the factories. So like just having these people on the ground on a really frequent basis is obviously very good support for us in this work.
When talking about monitoring and working for social standards in the supply chain, everything evolves around our code of conduct. This is kind of our list of requirements that all our suppliers must follow. This code of conduct is based on international frameworks as the ILO Conventions and UN Declaration on Human Rights. For example, it involves fair remuneration, no child labor, and so on. You think you recognize this. The most important or one important part of this is that this code of conduct comes from the organization I mentioned before called Amfori and Amfori BSCI. There are a lot of, especially in the textile markets, that are members of this organization.
When you become a member of this organization, you actually take the code of conduct from Amfori BSCI and that's the one you're implementing, meaning that we are over, I think, almost 3,000 companies today that use the exact same code of conduct and use the exact same way to follow up that code of conduct among our suppliers, which makes it easier for the suppliers as well to know about the requirements, to know how we're following up on this, which gives us the biggest strength of when implementing. The code of conduct, one part is what I mentioned, the internal inspection and the internal visits is also based on this code of conduct. In addition to that, we have the external third-party audits. So there are external auditors coming to the factories and doing an audit based on this protocol.
That's what we call a social third-party audit or it's resulting in that third-party audit. But it's not until that audit is done that important work starts when the non-compliances should be corrected because there's always non-compliances. But this gives us the framework to work with that. First is an audit and then you have the result and then you have the corrective action plan, which is followed up and then it's rolling on like this and based on continuous improvements. So I mean, we want to have non-compliances so we can work and we can improve. That's also why we're not putting strict requirements on grades. Like all our factories should be B-graded because then you put the focus a bit on the wrong things. Then you put too much focus on the grade instead of the continuous improvement.
I mean, for us, it's better to enroll a factory that is perhaps C or perhaps D at the first stage. And then with this work help them to improve. Then you have really contributed to improvement in these questions. And that's why also Amfori BSCI is not a certificate. It's a commitment of continuous improvement when working with this. Some other initiatives I just want to mention that are important for us. The Accord on Fire and Building Safety in Bangladesh now has actually changed name to the International Accord. And that was following the Rana Plaza disaster in 2012 in Bangladesh, where a factory collapsed in Bangladesh with thousands of people that missed their lives. And then this accord was established as a three-party agreement between the Bangladesh industry, the brands, and global trade unions.
During these years, it has been resulting in great improvements for safety, building and fire safety in the industry that wouldn't have been possible without this type of agreement. Since we have quite a big office in Bangladesh and a big share of our volume produced in Bangladesh is, of course, a really important initiative for us. We have also a Fair Labor Association. It's quite similar to Amfori BSCI, but for the U.S. market. That's through our Cutter & Buck company that we are members of the Fair Labor Association. CTPAT is perhaps not a typical social initiative, but it's also an American initiative that is more around safe containers and safe shipments. But still, it's more people from the outside having eyes on our production. That's why I lifted up here as well. That was all I had prepared.
So I would gladly open up for questions.
Thank you. Magnus Råman, Kepler Cheuvreux. I can start with asking about recycled nylon that you mentioned. Can you give any hints of the sort of premium price here compared to virgin?
You mean nylon or you mean polyester?
Polyester.
I expected that because nylon is a small part. I mean, today it's developing quite fast. So right now, it's not that huge price difference to choose recycled than not to. I think it would be a rather more interesting question in the next phase because today you use recycled PET bottles to use to do recycled polyester fibers. But there are quite ongoing discussions if the PET bottle industry wants their bottles themselves. And in that case, we will have a shortage of PET bottles for textiles.
And then we will have a shortage of recycled polyester because it's dependent on these PET bottles as it is now. So right now, it's not a big price difference, but I guess it depends on what's happening with the raw material in this case, which is PET bottles.
And then the follow-up with the second question is that you mentioned organic cotton, but you did not mention recycled cotton. And what's the reason for that? Do you not see that there is a supply in the market for recycled cotton?
Today, most of the recycled cotton is actually waste from the textile industry. So it's waste from cutting cotton for doing garments. And then you have waste and then you take that and do new fibers of it. That's the majority of the recycled cotton.
But that would be better than incinerating or landfilling things that the industry is not selling, right?
Yes, definitely. But then we also have another big question, which is the textile recycling, like textile to textile recycling, which is still quite challenging and not so scalable as it is today.
So the reason that you are not procuring recycled cotton fibers into your production today, is that because it's at a too steep price premium or is it that you feel that it's not recycled from used textiles, but rather discarded, not sold textiles? And then you feel it's not sort of nice enough?
Today, it's a combination of price and also quality because also when you recycle a cotton fiber, you always make something with the strength. And cotton from the beginning already is not the strongest fiber.
So if you have recycled cotton, you always do something with the quality. So it's a quality and definitely price discussion. But once again, now we're ending up in the material discussions and not taking the whole picture into account. So it always depends on what's actually the end product and what should it be used for.
I've heard from other clothing companies that one big thing is that they don't sell their clothes and then they scrap it. It could be huge volumes for some. Is that an issue for you or you keep it in stock and you always sell it?
I mean, we're in a... Given our company structure, we like stocks. So we don't have problems with having it lying on stock.
I think that makes us also differentiate us from the fashion industry where you have more trend-sensitive products and you need to switch the stock. We don't... I mean, that's a great advantage for us also in the future. We don't have the need to have that turnaround on the stock because we have a lot of basic products that can live for a long... It's not going out of trend. So it's sellable over a long time. And that's definitely a key part of the strategy onwards as well and where we have a clear advantage compared to fashion.
So it's fair to say that you sell more or less all the clothes you buy in?
Yeah.
Good.
Also interesting that under coming regulation, you will not even be allowed to destroy that type of products and production.
Thank you. Stefan Olsson, Ålandsbanken.
Looking at the customer part of this equation, which you showed, this is a rather small part. But are you contemplating any initiatives to, for example, second-hand trading of your goods or similar?
A lot of discussions about it, but it's a quite tricky one. Also, I think you're all aware about the discussions around H&M and showed up in Aftonbladet and so on. I mean, it's one thing that you arrange the collection. Okay, but then what should we actually do with this? And we don't want to end it on export and you don't have control on what's happening next. So it's nothing that we have driven from a group perspective because we think it's rather a local or company-specific initiative. It's better that it's driven locally. So if you can find more a local partner, you know where it ends up and so on.
So at this stage, we haven't driven the question on group level for that type of collection and distribution.
Karl- Johan Bonnevier, DNB. A lot of discussion, obviously, by garment. But if you look at the home and giftwear side, what kind of challenges do you have on that side?
Home furnishing have a lot of textiles as well. But I think the main challenge is around plastics and the plastic materials and a different type of plastic materials and chemicals and plastics, especially what's called food contact plastics, Sagaform and DG plates and so on. I think that's where the most challenges are linked to materials.
Okay. Thank you very much.
Thank you. Good afternoon, everyone. My name is Tom van Heffen.
I'm the Managing Director of Texet Benelux in Belgium, of course, located in Aarschot next to Leuven, close to Brussels, in the center of Europe, which gives us a good position to supply our goods to our resellers throughout Benelux, to Holland, Luxembourg, Belgium, but also to France, to Germany, because we have a warehouse central function like our colleagues from New Wave Mode have. So we also supply our colleagues in France and Germany and so on. We're also responsible for the brands Harvest, Printer, and Harvest & Frost. So we do the concept management. So we develop the products. We do the marketing. We collaborate with our colleagues throughout Europe, and we decide what is the best approach for our brands to go to market. So that's also a responsibility that we have in the Benelux. We operate AutoStore as well.
We were the second company in New Wave Group with AutoStore for, I think, 6 years now. And I will explain a little bit more the effects on AutoStore on our daily business. We are ISO 9001 and 14001 certified, and that's important for us for our day-to-day operations. We have a good overview of what are we doing, how are we handling our business, our day-to-day business, but also is what the market is asking from us. We are working closely together. We are dealers towards the end users. So we have a lot of direct contact with the end user, and therefore those certifications are needed for our business. We are also GOTS certified, which is necessary for the distribution of Cottover, which is one of our brands in New Wave Group. Very proud on the EcoVadis Platinum score. I will come back to that later on.
We have seen the presentation of Anni, which is on group level. Sustainability efforts on group level are really needed and very important, but also locally we have to do a lot of efforts to get to the point where we can say that we are on a sustainable track. For four years out of five, we have been awarded the Trends Gazelle, which is an important award in Belgium for the fastest growing companies based on turnover, based on growth in profits, and on employees. We have a fairly large design and custom-made department as well. Our business is stock business, but also decorating and also custom-made. I will show you later on a little bit more. Who are we? Our mission is to bring high-quality corporate workwear to the market. We mean high quality. Why?
Because sustainability is also about the longevity of a product. How long can a product be used, before it goes to waste, before it goes to end of life, of course? We try to have the sustainability effort throughout our whole company. You will see a lot of talking about that, and it's not just talking. We do act upon it. So I will show you later on. We have a vision that we are very customer-centric. Our customers are key for us. Everything we do is based on what are the needs of our distributors, but also what are the needs of the end consumer. That's why we always try to work in close collaboration with our dealers towards the end consumer. Of course, we have values. As also Tomas asked, have fun. We try to have a lot of fun.
We see that that's working. We have a lot of employees and colleagues that are working at our company for many years. I'm working at Texet for 20 years, but we have many more colleagues working for 20, 25 years at the company. So we have a little turnover in employees or in colleagues. Of course, quality high-quality products. We don't do, yeah, cheaper products. We have, we try to have high-quality products with a higher margin. And we act as one team. We call ourselves the Texet Warriors. So we go to market and we try to conquer the market. We are very ambitious, but always in a fun and a good, positive way. We are located, as I said, next to Brussels, but also in Holland.
We have a large showroom next to Utrecht, which is also very central in Holland, where we invite a lot of dealers and end consumers to come and select collections to look at new styles, new brands, doing the launch of Tenson, for instance, last week, and where we invite a lot of end consumers as well so that they can really get to know our products, get to know our services, and see what we do and how we act towards the market. When the customer isn't able to come to us, we go to them. We have an online, a mobile showroom. Sorry, not an online, a mobile showroom. It's free to use for our dealers, but also free to use for our end users.
So when we have a, let's say, a nice deal for dressing of 500 people, then we can go with our van towards that company and that staff can use the lockers inside and try and do the fitting and so on so that we can speed up the deliveries and have a really good service towards the end consumer. So that's something that we are using quite a lot, but we use it also for fairs or for open doors at customers' events and so on. So that's a way of bringing our products and our services towards the dealers and the end consumers. As I said, we operate AutoStore together with 6 or 7 already in UF Group. And I must say that's the best investment that we ever made.
You can see over there that we used to do 250 order lines per FTE on a day-to-day basis. That means going towards the goods. We were a man-to-goods principle, and now we're a goods-to-man principle. And it means today we can do, that's the best result that we had until this day, 1,400 order lines per FTE. So that's a huge improvement for us. Without AutoStore, we wouldn't be able to grow on the same pace that we have grown the last few years. That's for sure. Also, what is very interesting on AutoStore is that it's scalable. We have started with 4 ports and 16 robots. Now we're up to 6 ports and 29 robots. So we can scale up the business where the needs are. If we have more products, we can add bins. If we have more orders, we can add ports or robots.
So we can scale where we need to scale. That's the reason why we're very happy with AutoStore and actually now also looking to invest to extend the AutoStore as we speak. We also signed a new rental lease for 5,000 square meters extra. To follow our growth, we need to do those investments. But I think in the beginning of this meeting, there was a question, how will you improve your EBIT? Well, this is one of the drivers for us to improve our EBIT. This is really helping our business going forward. Yeah, of course, I had a small video, but you already seen AutoStore. It's also a very dense solution. So it means that you don't have to add many more square meters to add the automation. So it's a really good solution.
Where we are today, 2023, EUR 31 million in Benelux and with an EBIT of 21%. So we just surpassed the new goals of New Wave Group. For the last five years, we have been on a steady growth path with increasing gross margin and bottom line as well. We foresee that growth continuing the following years. We have very nice new collections coming towards us. We're very happy with Tenson. We will be responsible for the corporate Tenson distribution in Benelux. So that's something that we're really looking forward to. But also all our other brands are very important for us, and I will tell you more about them a little bit later on. If we look at the Benelux market, and I want to really point out that this is a corporate market. This is workwear. We don't do retail. We don't do gifts and home furnishing.
So we only do textiles. When we talk to our colleagues, then we will see that this is probably the market towards the distributors. So this is not to the end consumers. If you go to the end consumers, you have to do the markup, of course, the margin for distributors. The top three is Tricorp. It's a local Dutch company, very big in Holland, but not existing in the rest of Europe. The second one is a Danish company, Mascot, who is quite well known in the workwear markets. And then you will see that Texet, we, and New Wave Holland is a sister company. As you know, we have a lot of subsidiaries in New Wave Group. We are responsible for our brands, and New Wave Holland is responsible for their brands. They're distributing Craft and Cutter & Buck and Clique.
We are doing Harvest and Printer and ProJob and so on. Actually, we like competing to each other. But here you can see that one plus one is three. We are fighting for our brands. They are fighting for their brands. And we can see that we're uplifting in the markets. So if you combine those two companies, then you will see that Alligo is clearly a market leader in Benelux as well, not only in Sweden, but also in Benelux in this segment. Alligo is very strong and has a very strong position. We estimate that the market is around EUR 400 million towards the dealer, only workwear, of course. If you put in gifts and home and so on, you will get to a higher value. But is this the end for us? Of course not. We have 8%.
It means 92% is still available for us. So very ambitious. Our goal for Texet Benelux is in 2027 to reach the EUR 50 million turnover. We will act upon it accordingly, of course. Our brands, I will not go too much into detail, but we really talk about ourselves as the one-stop shop for every job. That's what Tom has also said. If we go back, sorry, to this market, you will see Tricorp is a one-brand company. Mascot is a one-brand company. But if you see TopTex, Falk & Ross, those are multi-brand companies, but they don't own the brands. Those are, how do you say it? They license the brand, and they have the exclusivity to sell those brands to the market. We are very different. We have multiple owned brands, but we are a multi-brand company.
So we can have the best of both worlds. We decide our own products. We decide our own distribution. But we have a multiple brand offering to our customers. This gives a very strong position to the market. These are our brands. We have the basic styles with Printer. We have the more corporate fashion with Harvest, the shirt brand Harvest & Frost and the blazers, as you see. Of course, you have the presentation of Tenson. We sell ProJob workwear towards the distributor, of course, and we also have Cottover, our sustainable basic brands towards. Very happy with the portfolio that we have today. A one-stop shop is nothing without services. We don't sell a product. We sell a service. We give some added value to our customers. We have a production facility in Poland. Short video.
We have been doing that for more than 13 years already. We supply mainly finished products. Customers can buy blank products from us, but they can also buy finished products from us with prints, with embroideries. But we go even a step further, as you will see later on. We have 71 embroidery heads, which can do roughly 15,000 units per week, the output. We have 6 printing machines, fully automated, where we can do roughly 13,000 pieces output. And then we have 6 sewing ladies who will do decoration in various ways, stitchings, and so on. We really have an operational unit in Poland. 2 times a week, we have trucks going from Belgium to Poland and coming back. We have a lead time of roughly 2 weeks, which is much longer than we have been shown by Cutter & Buck.
But of course, we only do B2B. So our customers are well aware that it's, and we do bigger volumes. We don't do one piece or two pieces. We do 50, 100, 500 pieces. We also started up last year with a local in-house embroidery facility so that we have two offerings now. We have a short lead time with a higher price, and we have a somewhat longer lead time with a cheaper price from Poland. But with a good gross margin, we calculate also on those services, of course, a very good gross margin. And these are sub-results, of course. We can show you many more. But we do embroideries. We change zip pullers. We change labels. We add a lot of different techniques so that the customer can buy a stock item, but it seems like a custom-made item. And it's a unique item for that customer.
In that way, it's also a way of keeping your customer connected to your company. Because once they have chosen for that collection, the chances are quite big that they will keep this collection for many years. So that's the reason why we go a little bit further to keep the customers close. The second part of our service is, of course, custom-made productions. And here we are very proud that we can do, for instance, if you go to Holland via a plane and you go to Schiphol Airport, then you will see a lot of people wearing all kinds of fancy clothing. That's us making that. Or if you go to Holland and you're unlucky and you have to go to an ambulance, the people wearing the fluorescent clothing, that's also us.
So in many ways, we do quite nice custom-made productions where we start from a design in 2D. We can do it in 3D, and we can make it also in 3D rendering videos so that the customer can really feel in a digital way what the goods will look like in the end after production. So that's also an important part of our business. And then in COVID, we had. Everyone had the same problem. We weren't allowed out. So it was difficult to do the fitting for people and take their measurements and so on. So together with Ghent University, we collaborated on Shavatar. And that's actually a 3D body mapping tool where we have billions of measurements. And so you have to add three steps. And so the system really calculates what size you have to choose in that product.
All our products are uploaded in that system. So immediately, the system will recognize, okay, Tom, you need an M or you need a size 50 of the pants. So that's a digital solution that we're offering to our dealers as well, yeah, to tackle that problem and to go a step forward in the digitalization of our business. CSR, of course, Anni and her team are doing the biggest part of the job. And I'm very happy with the collaboration. We also have a CSR manager in Benelux. We decided many years ago that it was a necessary step for us. The Belgian government and Dutch government are trying to beat the EU in going faster and faster towards a sustainable future. And we applaud that, but sometimes very hard to follow.
So we decided many years ago, okay, we need someone to help us in that on local level, not only on group level, but also on local level. Two years ago, we asked EcoVadis to rate us. And EcoVadis is probably the most well-known sustainability rating association in the world. More than 180,000 companies yearly do these audits to see where they stand. And it's based on four principles: the environment, ethics, and I'm sorry, I forgot the T there. So sorry, labor and human rights, and sustainable procurement. And very happy with the outcome because we score 84% or 84 on 100 points. And that brings us in the 1% of the most sustainable companies worldwide in our business. And actually, there's no one higher ranked than us today.
That's for us a way of mapping where are we, what are the things that we have to improve, and where do we need to improve. The audit for this year is ongoing. Hopefully, of course, we can reach the maximum score of Platinum again. But also on local level, as I said, we are responsible for Harvest, Printer, and Harvest & Frost. Anni also talked about lifecycle analysis is the only way to calculate how a product is really sustainable or not. We try to, if you look at, in the back, you see the Printer garments. If you look at the hang tag, you will see that we really try to make it so that people can really comprehend what they buy.
So if you buy this soft shell jacket from Printer, then, and you compare it to a normal soft shell jacket, which is not made out of recycled polyester, then you will see the difference. You will see that this soft shell didn't use 4,000 liters of water like the other soft shell or less water. And that's comparing with taking 65 showers. So we really have to make people aware, okay, if I buy this one, then it's 65 showers that I save compared to the other one. So that's bringing awareness to the end consumer and to the buyer of whatever company you're working with. Or it's 7 kilograms of CO2, which compares to 290 coffees or one big steak in a restaurant. And you know, okay, this is the impact. Or watching 26 hours binge-watching Netflix, a new series on Netflix.
We also mentioned it on the labels and so on. It's always an estimation, of course. We use international protocols and standards together with Ecochain. That's the company who's helping us in that. That's also based on international standards. We also do sustainable productions by working together with the Belgian government on the European Green Deal, differently packed here. We promote all our goods are packed in plastic bags. Shipments from Asia, you need protection for the garments. So everything is packed in plastic bags. We already have shifted towards compostable bags. So you can just throw them in the garden, and they will compost after several weeks. But now we are really trying to push our customers to accepting no bags, which is still a problem. Step by step, we are trying to convince them.
For every 100 poly bags, we planted three in Belgium. So we are now planting a small forest together with our customers so that we can lower the impact on local level as well. And then we have the EU Green Deal, which is a big one. And I think Anni already talked about it. We have to, how do you say it, numerize? I don't know the exact words. We have to capture what is our carbon footprint in the future. And we have to capture Scope 1, Scope 2, and Scope 3. And the different scopes is the building or it's the product from Asia, different scopes. And we have done that audit already together with Tapio. We have made our carbon strategy available for distributors and for the end consumers.
So the result is that after an evaluation, we calculated Benelux as 62,279 tons of CO₂ emissions on a yearly basis. That was in 2022. You will see that Scope 3 is by far the biggest one, which is products. The biggest, like Anni said, is the biggest impact we will have is on product level. Of course, we already have 90% of our fleet is already electric or hybrid, but mostly electric. We have solar panels on the roofs and so on. On local level, we can have a big impact. On product level, it's an ongoing process, of course. In Belgium and Holland, they're bringing on the extended producer responsibility. Everybody knows if you buy a refrigerator, you have to pay some extra tax when the product is end of life.
That tax is used to, how do you say it, make it to waste and put it back in the waste and handle it. Also in textiles, it will come. So together with some competitors in Belgium, we started a nonprofit organization, CircleTex. And it's all about measuring how many textiles are brought to the market. And we have to pay a fair tax on that so that in the end, at the end of life of the product, that money is used to find new ways of bringing those goods, of those fabrics back into the system via isolation for walls or via making new fibers out of it. But that's a small percentage. Or car seats, the car industry is using a lot of workwear actually for making the seats in cars and so on. So that's something that we are working on quite closely.
We already determined we bring 400 tons of textiles to the market in Belgium per year. We know the volume that we bring to market. We have to calculate that for Holland as well. Therefore, we started a collaboration with GAIA Circular. It's a Dutch company. We put boxes at our dealer's offices or at the end user. Those boxes, when they're full, GAIA picks them up. They handle all the waste. From that waste, they have different splits of where the waste is going. Some of them is going to the burning ovens and is burned. Another part is used for the car industry. Another part is used for isolation materials and so on. The good thing is it's quantified.
So a customer can log in on the website of GAIA and can really see how many textiles, how many kilograms he brought back, and what has been done with those goods. So it's also making it clear what is happening after the life of one product. So in the end of my presentation, why Texet workwear? We have strong brands, strong parent company, New Wave Group. We have a broad spectrum of industries that we target. We have efficient logistics solutions. And I think unmatched services, we really try to be top-notch. And then, of course, we are a sustainable development frontrunner, which is very important. So yeah, we really think that we are the one-stop shop for every job. So yeah, that's a little bit the situation of Texet Benelux. Thank you. Any questions? Any questions? Yes, sir.
How big of an improvement on your margins did you get from the AutoStore investment?
That's a good question. How big in percentage points?
We were at 21% now. So before, where were you?
Yeah, before AutoStore, we were much lower. Much lower. It's okay to, yeah, yeah. So we were like 10%-11% before AutoStore. Yeah, yeah, yeah. So of course, not only AutoStore had that impact on improvement on our margin, of course, but it's a huge impact because we can do a much higher number of orders with the same stuff. And also, a lot of people think if you do the automation, you have to fire a lot of people. We didn't fire anyone. Actually, we have still the same team, but we can handle double or more, even more than the amount of orders. So that's the biggest impact, of course. Thank you. Thank you.
Very punchy growth target to get to EUR 50 million. What are the building blocks to get there?
Yeah. So since we are now responsible for the own development of our own brands, of the brands, of course, we decide what is coming to collection. I'm also highly invested in the project development, in the workwear development. So also there, we have huge investments coming towards us. We're opening up more lines towards retail online players. So that market is a little bit untouched for us. So we are focused on that area as well. So in general, it seems quite a feasible target. And of course, we launched Tenson, which we think, which we believe will be a very good brand for us as well. So if you combine those different, yeah, improvements, then you will see that target is quite reachable, actually. Yeah, yeah.
So hope that answers your question. Any more questions? Thank you.
All right. Good afternoon. Great to be here. My name is Stefan. I met a lot of people before in this room. For you who haven't been seeing me before, my name is Stefan. I've been working for the New Wave Group since 2010 and the whole time at the Craft organization in Borås. So apparently, we are having a lot of fun, right? So we stay for 14 years. Great to be here. You've been hearing a lot about the Craft brand in the past. I won't go through a big, big dig the presentation in the history. I will more dig into the teamwear business, the footwear business, and the sustainable part of the business, if the time will let us be there. And then we do all the questions afterwards, right?
Everything began with Craft in 1977. The Air Force, the Swedish Air Force, asked for a base layer for the pilots because when they ended up in trouble and had to shoot themselves out in the atmosphere, they were wearing base layers in cotton. This was the first base layer we did, invented one for the Air Force, for the pilots in 1977, existing of a polyester thread that made the moisture go away from the body. And actually, we saved life for pilots. And we've been going on since 1977. New Wave Group acquired Craft for SEK 1, one Swedish crown in 1996. From there on, we have more than EUR 200 million in revenue. We are today present in more than 70 countries around the globe. And we are turning a Swedish outsider into a player on the global arena. Key markets are still the Nordics.
We also see Germany, Benelux, Canada, and the U.S. as big markets. Biggest growth last year came from Benelux and from Denmark. We have a target in 2027 to double this business from EUR 200 million up to EUR 400 million, same as we said last time we stood here in front of you like a year ago. We're going to do that by having four different business areas, the same as Christopher and Jens presenting for Tenson earlier on. We have not three. We have four business areas. This is nice and good for us. This makes us pretty stable. We're not just depending on the retail business, which still is the biggest one. We have actually three more. We have our own e-commerce, retail business, club business, and the corporate business. Today, we're going to focus on the teamwear and club business and the footwear.
Craft Club, you've been hearing a lot about this from Torsten and no doubt why, because this is going really well for us. The club business has a great potential, very, very great potential because looking into some competitors, and some of you maybe haven't even heard about these brands, but they are bigger in sales in teamwear than Craft is as a whole brand. Looking into Joma, for example, a Spanish player having more than EUR 250 million in revenue in 2022. Or looking into Hummel, our Danish brand, having EUR 300 million. Or these may be, for some of you, unfamous brands from Germany called Erima or Jako, together having more than EUR 200 million in revenue just doing teamwear business. So the potential is huge. We set up a target three years ago to reach EUR 100 million in 2027.
We are actually ahead of that pace right now. So if we continue with that pace we have right now within the teamwear business, we're going to overachieve this target in 2027. So how? How do we do this? And what do we do differently from other brands? And how do we succeed within the teamwear and the club business? Well, it's important for you to understand we are not trying to convince or persuade a consumer. We need to convince a club or a board of a club or someone like you and me being mom and dad, sitting in the club, taking a decision of which brand should we go with for this club. That's how we need to convince. That's the consumer or customer we have in front of us. It's not an end consumer. It's a club. So it's important for us to be visible.
It's important for us to make a step, an entry ticket into a market. Hammarby, IFK Göteborg, was the entry ticket for this market. If we can fulfill 4,000 kids playing football every single day on Södermalm in Stockholm, that's a receipt that we can help your club with 50 members or 100 members or 500 members. That's the ticket you need to pay. We don't do it just because of having nice brand exposure. It's good, though. The pure thing is, and the major thing by stepping into a club like this or the one we do later on today, AGF in Aarhus, is the same thing. It's an entry ticket into a new market. And U.S. parents and U.S. club members will say, "Okay, they can help out AGF. They can help out Hammarby. That's fine for us." So that's important.
That got us to more than 5,000 clubs. We started in 2018 and already now, less than 6 years from that, we have more than 5,000 buying customers' clubs around Europe. We're not even present yet full out in North America. This is just in the EU. But the New Wave Group structure helps us to get this club owner or club board or the person in the club to choose us because we have much more than just one product. Our competitors are basically having the ones on the very right side from you, sorry, left side from you, match and on-pitch training for the kids. They don't have the rest. If we go head to head with Nike, Adidas, Puma, which we are doing today, every single morning, we wake up and go head to head with them within the club business.
They do not have what we have. They don't have this on stock. They don't have the things for beers or coffee or the caretakers of the kitchen or whatever it is. They don't have that. We can fulfill a bigger need for your club. We also have a structure in this group that we believe in local presence and we do believe in local sales reps. That's why Tom is responsible for Benelux. He speaks Flemish. He speaks French. We do believe if you live in Finland, you need to speak both languages. If we are running Canada, we need to speak not Spanish, French, and English. Other brands, I won't say which one, are not thinking in this way. They think they can sit in Stockholm and run the whole Nordics. We don't believe in that business.
This business is still made out there every single day, out at the field, at the pitch with the clubs. That's what we believe in in this group. It makes us a little bit different. We also believe to focus on the female consumer. This makes so much sense. But believe me, we are the only one having that big width of styles in our warehouse with female and male fitting. A lot of different brands have few items for female fitting. And if you go to a club and you say to them, "Would you like to go with a brand that has apparel that fits for men and women or just for the men?" That decision is going to be super easy in 2024, I'm telling you.
We are basically still, and it's pretty sad that this is that we are the only one doing this. We do believe in stock. We do believe we have things in stock and that can be delivered quickly. I promise you, if you place an order on the Craft website today, it can be dispatched tomorrow. Most likely, it could be today as well. Our outdoor store has 50,000 bins, 30 robots, and it runs automatically, right? Even with the packing, it runs automatically. We not just have quick deliveries. We have things on stock that you need for your club, meaning if you are a parent and you need a T-shirt for your kid, that can be delivered.
It's not fun when your son or your daughter is going to be playing football tomorrow and they cannot be part of that team because you're lacking a T-shirt, which is going to be delivered in one or two months later on. We also have a very broad assortment, meaning from every single color, orange, purple, light blue, the whole way to white, black, and yellow. Anni was talking about reuse and someone you asked about, do we sell secondhand? Well, from now on, we're working with all the big sponsor clubs. They are not allowed to throw things away. And bear with me, some of these big, big sponsors that we are doing, for example, the Swedish Ski Federation, they use more than 2,000 pieces a year. If just one logo will be changed on that suit, we need to throw it away.
We don't do it anymore. We resell the stuff that we are giving away to our teams. IFK Göteborg started last year. It took them 11 minutes, 11 minutes. It was a line, a very long line to get into the shop and to be buying the reused garment that the players were playing in the year before. It was packed in these bags. It was hundreds of bags with T-shirts, hoodies, old game jerseys. We sold every single one of it. Some stuff were too bad to sell, so we remade it into flags and sold that as well. That's the way we take sustainability to the next level. This is for sure. We can do a lot of things in sustainable fabrics, which we are doing. But this is the next step.
We're also looking into sustainable decoration and again, looking into a jacket, for example, here, this is the Ski Federation in Sweden. If they change out that sponsor for next year, we again need to be selling it. But now with Velcro, we can take that logo away and use it one more time. We're looking into smaller clubs. We're now printing with a new printing method, which is going to be heated and reheated to the next step. We're not there yet, but we need to take responsibility in how we do printing and decoration for our clubs. This is also unique for us. No one else is doing this right now. But we also do tailor-made design. This maybe makes sense if you sponsor a big club that you do what they would like to have, but that's not the case.
Hammarby changed into Craft because they were forced into things they didn't want to have. So this is what we did, completely custom designed for this club. And Jakob and Rasmus are going to tell you more about this for AGF, what we've been doing for them, also custom made. Every single club on that level is different and they would like to be unique and we can help them out. So this is the kit that Hammarby had last year. It's been a great success. It sold out very quickly and it's due to the fact it's being unique and it's being made in this unique design. This, all in all, makes our teamwear offer very unique. And again, it's not the end consumer we are trying to convince. It's you that's running a club, sitting in the club board and need to take a decision.
And you're going to be the one getting the phone calls from moms and dads that are not happy with the delivery or the quality or the fitting or the sustainability. That's why we in this group make a perfect fit and a perfect match into the teamwear and club business. Stepping in, haha, to footwear. I'm from Gothenburg, right? Stepping into Craft footwear. This is different. This is way different from the club business. And bear with me. And we try to sort of sort things out here now in the coming minutes. The question is, why are you doing this? Because again, when we stepped into teamwear, there were so many doubters. I don't know how many phone calls, how many emails I got from our customers saying, "Stefan, please don't do this. You are insane.
You can't do it." And I think in this group, the best thing we know is when people telling us, "It can't be done." Then we're going to prove you. So if you want to have more sales, tell us we can't do it. And if people were thinking I was insane and crazy when we stepped into the teamwear business, which is a pretty big business with some really big competitors, there was nothing about this. Because this is the toughest thing you can do as a brand within the sports industry, I'm telling you. So why are we doing this now? Why are we doing this step into footwear? Well, running is the most popular individual sports activity in the world. Period. The running gear market is one of the highest values industries among sports retail globally.
It's one of these industries, one of these gears that looks the same in every single market because the sizing is the same. But if you're sizing for a T-shirt, it's not the same in China as in Brazil or in the U.S. or in the EU. Footwear can be done wherever you are in the world. If you are in Antarctica, it can be done. And if you are in Asia, it can be done. But base layers, cross-country skiing and biking can't be done in every single part of the world. This can be done. Looking at Strava, more than 20 million people using Strava. Running is the most uploaded sport that people are doing. This is major, major sport, meaning that the competition is going to be pretty tough.
So if you look into how people are Googling when it comes to the running gear, this was an eye-opener. Pretty simple data. What are you guys Googling at when you are Googling for running? Well, the blue line there is the shoes. And the other ones here are shorts and T-shirts. That's what we've been doing for the last 47 years for running. So the footwear is super important. It's the most important thing for you as a runner. It's not the T-shirt, unfortunately, because we have a lot of T-shirts in the warehouse. And if you go back to 2012, this is just 12 years ago. The market looked just very different. It was four big brands basically owning the segment of running footwear in the world. It was these four brands. And it was hard. This was basically a little bit pre the e-commerce era.
The shelves in the stores were all full. There was no more space to get in there because these four brands occupied every single shelf and selling pretty well. So what happened? Well, this is 2024, the brands that run the global shoes business for running in 2024. It started with e-commerce, I'm telling you. More and more consumers could actually find more stuff. But there are more things to this, more things that could be done. I'm going to tell you why. So this is basically brands that are today present on the global arena of running footwear. The brand Brooks is bigger than Nike for running footwear in the U.S. So how is it possible for a niche brand to take market shares from some of the world's largest multi-sports brands? Well, to explain that, it's basically three steps.
You as a consumer are much more willing today to spend more money to test new shoes than you were in the past. Then you had one pair, maybe an Asics Gel-Kayano that you were very happy about. You bought that one every single time going down to your local store and buying a new one after a year or two. But today, look in your wardrobe. If you're a runner, it's a runner in front of me here. I think Stefan has at least 20 pairs of shoes, 25 pairs of shoes for running. Is he abnormal? He runs abnormally a lot. Yes. But no, people have 10 different running shoes today because they run on different surfaces. They run fast or slow or long, long, long distance. They need different shoes.
Niche brands are superbly good today to interact with the consumer, doing run clubs, giving them a beer or ice cream afterwards, meeting up here in Stockholm at Gärdet and run together with customers or consumers. That didn't happen in the past. You as a consumer, you change your behavior. It's easier today to get hold of new shoes on e-commerce. Number two, retailers of today are not really allowed to buy what they want. Big mega brands are having a different distribution strategy and saying to customers, "I'm sorry, you're not allowed to buy anymore." You don't know as a retailer if that decision is going to be changing for next year or next season or next week. You can be selling a brand massively in a store. After a half a year or a year, that brand can tell you, "You know what?
You're not allowed to be buying this anymore because they changed the brand strategy." So as a retailer, you need to take much more risks today to have much more brands in your store and sell more brands to the consumer because you're never not going to know what that brand is going to be telling you. This is something changing. This is mega trends that are changing the world. Bigger brands, major big sporting brands are closing down distribution and trying to drive the traffic to their own e-commerce, meaning if you are a sports retailer, a running specialist in Italy, for example, you're not allowed to be buying Hoka anymore. Will you then just close the door and say, "Okay, I give up," or will you be buying something else? Most likely you will continue fighting and buying something else.
And number three, distributors that are selling our stuff. We sometimes use distributors in markets where we are not present as a New Wave Group. They feel the same. So back to the Italy example. We have a distributor in Italy that sold more than 600,000 pairs of Hoka every single year. After six years, Hoka said, "Nope, not allowed anymore." So they stood without the EUR 30 million in revenue that they had from Hoka. And they called us. We would like to be selling the Craft shoes. This is what's happening in market after market. So we are now moving into Argentina, Paraguay, Chile, Greece, China, Italy. Same thing. Distributors are seeing the same thing from brands. So this is basically, guys, the perfect storm for us. This is the macro big trends that are happening out there within the sporting industry. So apparently it works.
A niche brand can apparently be successful with all these big multi-sport brand giants around them. Because in 2009, Hoka was founded and today they have a revenue of $1.4 billion. In 2010, On Running was founded, CHF 1.2 billion in revenue in 2023. Brooks, as I said, bigger than Nike in the US with $1.2 billion in revenue. This can go on and on, but it's pretty impressive to see. When I started at New Wave in 2010, On Running was actually founded and today they have CHF 1.2 billion in revenue. So yes, it can be done. So why Craft then? Why and how do we do this? Well, we do believe that we're going to be different. A lot of these brands are American or German. We're going to be Swedish. We're going to be Swedish all in, I'm telling you.
We're going to be the Swedish endurance brand. This is different, different from what we have in the competition. So what is Craft better at than other running brands? Well, I think we do understand that the performance-driven runner runs on all surfaces: road, trail, and everything in between. Meaning when you go to the forest for a trail run, you will be running on gravel, on paved roads, on asphalt, and on trail. You're going to be basically experiencing all this. And we're going to offer the best road-to-trail shoe in the world. So we are the Swedish endurance brand that offers the world's best road-to-trail running shoes. And what is that? Well, I was running this morning along the Karlbergs kanal. That was asphalt. Sometimes it was slippery. It was snow, but it was gravel. I'm that perfect runner.
You are as well because you don't only run on asphalt. You very often run on very different surfaces. The focus segment for us is road-to-trail. It could be called gravel. It could be called hybrid. This is a new category within running specialty stores. If you go to Löplabbet now, you're going to see that they have this as a category. This won't be the biggest sales for us. It's going to be roughly 35% of all the pairs we sell. 50% will still be regular road running. But this is the way, the niche that we're coming into stores with because no one else is doing this as good as we are doing. Who else is doing road-to-trail? Volvo is doing it. Subaru is doing it. The entire bike industry is going nuts about gravel and being everything in between road-to-trail. Nothing unique.
This is the new shoe. Bear with me. It's here. It's going to be launched in a few weeks' time together with a brand called Vittoria. Vittoria is a very famous brand for bike tires, one of the biggest bike tire brands in the world. We're launching this shoe now together with them as the best road-to-trail shoe within a few weeks' time. Again, 35% of the business will come from these kinds of shoes. But this is going to be the entry point into a store. Looking at sales and distribution strategy. The yellow ones here are parts of the world where we now sign distribution agreements with new distributors. They all have one thing in common: the fact that they've been actually canceled from someone else and they are looking for new partners. It's the perfect storm.
We're now going into China, to Australia, the southern part of South America. In Mexico, we're already in. Started for a long time ago. The old On Running distributor is now doing Craft footwear. This has been opening up new territories and new markets for Craft because, again, we are strong in base layers: bike and cross-country skiing. But it's hard to do that in Mexico. It's pretty hard to be biking in Mexico because it's dangerous. You can't even barely now today be biking in Beijing or Shanghai with all the traffic. When I was in Beijing 20 years ago, you can be biking around town. That can't be done anymore. But you can be running. It's a great potential. So we divide this in three different levels, three different categories in how you're going to sell the footwear.
The very right one here is actually if you come to the market with really, really unique technology, something unique, innovative thing, right? Like On Running did, the cloud running, perfectly fine, rocks the market. The left one is more the proven performance, meaning that you can go into a running specialty store and say, "Hey, I would like to have a pair of Asics or a pair of Nike Pegasus." They don't really have to be that recommended brand because they are already proven that they are good. We are something in between, right? We need to be in that middle part, the recommended performance. So we need to put the energy in convincing you guys as consumers, but very much so to convince the people working in running stores. We need to be that brand.
When you say you go into a running specialty store, "Hey, I would like to go running," we need to be one of these three pairs that you're going to test or one of these four pairs that the guys that work in the store will present to you because we know then all feeds are different. So bear with me. It could be different, of course. But we know if you try these on, you're going to be happy. They are good enough. We're testing them. They are better than the competition. But we just need to be recommended somehow. And we need to be convincing you that this is the best. And again, here you see the difference. Now we need to convince you and your EUR 200 in your wallet compared to what we did in the club.
In the club business, we are convincing someone else because you, as a parent, have no choice to then say, "I don't want to buy Craft for my club anymore." You have to because that decision is taken from the club. Here is your money, your wallet that needs to be spending EUR 200. Or for the new shoe that we have, it's very bouncy called the Craft Pacer. And EUR 140 needs to be spent on this shoe instead of Nike, Adidas, Asics, or some other proven brands. That's what we're going to do to be more recommended performance. That's where we're going to end up. This means that we are basically in phase one. And in some countries, we are in phase two, that we need to be getting into the running specialty stores. So if you're in this town, you can go down to Löplabbet on Kungsgatan.
There is Craft on the walls. Try them on. Go for a run. In phase two, you can scale up and go into some multi-brand stores such as Intersport or Stadium in this country. Then phase three, reach the broader audience. Then phase four, really drive volume. We always carry this on craftsportswear.com. It's the most sold item today on our own e-commerce because, again, it's pretty hard for the consumer to find it in store. That's why we can communicate and always find it here. So what's the goals then? Well, we're going to do, in 2027, 1 million pairs of footwear. We are today doing roughly 250,000 pairs. Started in 2017. It's been taking a while, but this is going to take a while before we really get up to that big level.
So in 2027, 1 million pairs, that means roughly EUR 60-EUR 70 million in revenue for us. In 2030, we would like to be the top 20 largest running footwear brand globally. Then you need to run basically, you need to sell about 1.5 million pairs as of today to reach this target. And again, guys, if On Running started in 2010 and doing CHF 1.2 billion and Hoka is doing $1.4 billion since 2009, we can do this. Sustainability. Time left, Lars? Thumbs up. Sustainability. Anni was presenting a great presentation about sustainability. This is going to be more about how we take things to the market. How do we like to communicate to the consumer to really convince them that we are doing the right thing?
Well, first of all, we do think that having a garment for a very long time is the smallest footprint you can do to the environment. I have a funny story. A few years ago, I got an envelope with a pair of base layer pants from a man writing a hand note. He was very disappointed. He bought this pair of pants in 1987 and they now broke. We answered him by sending a new one to him with a handwritten note. We still have this pair of pants in a frame at our office. He bought them in 1987 and he sent them back in 2020 or something. This is the best proof of having things to live long. This is the smallest footprint we can do for the environment. We do products. They're going to be here for years and years and years.
As Anni says, we have things on stock. They are sometimes boring, blue and black. But I'm telling you, they're going to last. So they're going to last for a long run. We are so convinced that our base layers are so good. We're now promising a lifetime guarantee. So that man that sent this nice note in the envelope, he got a new pair. We promise you guys, if you buy a Craft base layer, they're going to last for a lifetime. This has been running since 2022 now. Very few things come back to us. And if it does, you get the new one. This is sustainability for real. This is sustainability on its very best. We can tell the customers we're not just doing things in sustainable fabrics. We're taking responsibility because we use fabrics that are preferred.
I use the word preferred because you never know if they're going to be preferred next week or next year. We need to be changing this every single time. We use wool, recycled fabrics, SEAQUAL, which is actually things that come from the ocean bottles that we do into polyester. We also do plant-based products. So last year, in 2023, the first time we did a plant-based, bio-based running capsule. So this was made from a bean. It's called the castor bean. It's being grown in Europe. You can do an oil. And from that oil, you spin a thread that reminds us a bit like the polyester. This is now online on our e-commerce, ready to sell, bio-based running capsule. And again, I love this. We are taking responsibility of selling the garments that our athletes have been wearing.
It's not bras and underwear, but the rest being sold, the rest being sold off the season, collected and sold again. That's what we do. When we come to this, to clubs around Europe, this is super unique. This is our way of taking responsibility of things that we've been putting print on and we have been giving away to a club. This is again sustainability at its best. Decoration, as I told you before, how we use the Velcro and different solutions for having this. We will have a pretty high, ambitious target to 2030 to reduce the CO2 with 50%. In 2025, all products will be fully or partly made from preferred fibers. No new items being made at Craft from 2022 and onwards are not, sorry, are all being made by preferred fabrics.
So nothing is made from old polyester or from bad polyester. This is how we communicate to the consumer about sustainability. Anni's work is great for us, great platform. We can lean to Anni and then we can tell the consumers what we are doing. With that said, I'm done. Questions?
There's Stefan Olsson, Ålandsbanken. When talking about shoes, you were focused on the running shoes in your presentation. How about other sports? What are you thinking there? I've seen that we are into indoor shoes, for example. What's happening? What plans do you have for that?
Yeah, great question. We do shoes. I think it's important to see that we do also shoes that are going to be sold in teamwear, in the club business, and also in promo. So add on to this what we have. So basically, the new one here is going to also be a version of this being sold into the promo business. We are looking into doing other sports in the future. It's nothing sort of done yet, when and where. We really need to be successful with what we're doing right now. It's a big, big task that we have in front of us. But yes, we are looking into new sports and we are looking into other kinds of footwear. But again, it's going to be further on.
Hi, Stefan. Emanuel, Danske Bank here. Yes, a question on the running segment here. You're talking about the distributors, which are also being canceled more or less by bigger brands to some extent. You're mentioning this distributor in Italy. I think you mentioned around 600,000 pairs of shoes from Hoka. How quickly do you think you can ramp up over time from that kind of distributor? How long does it take normally to get into that size?
Yeah, great question. Yeah, basically, it can take a while. It's not just the fact that we can sort of replace Hoka tomorrow. If it's that easy, that would be nice, right? It takes a while. Though what's happening is that we're going to be ahead of some of the other brands because the distributor has some really, really good credibility and knowledge in his market, right? So meaning when the former Hoka distributor is coming with our stuff to his customers, they're going to give a lot of confidence that, hey, this is good enough. Again, it's going to be the same hard work as they did with Hoka to convince the customer, to convince the consumer to actually change from your pair of Nike Pegasus. That won't be easy. They have to do the same thing. They, though, have a recipe of how doing that.
That's what we said with the proven performance that we need to be out there. We need to be convincing these people working in running stores that we're going to be one of these choices that they do when they say, hey, Emanuel, I think you need to be running in these pairs of shoes, right? We need to be one of these three, one of these four shoes that they present to you. So it won't be that easy, but it's going to be giving us some millions ahead of the other ones, right? So no, we won't be doing 600,000 pairs in Italy tomorrow. But for sure, we would like to be on that spot. The good thing with this is the Hoka distributor, for example, now in Italy, they had more than 1,000 buying customers. Hoka said, we're keeping 200.
You had 800 customers that were not allowed to be buying that brand anymore. Those stores are for sure looking for other brands.
Great. Thank you. So a lot is happening on the running shoes side. And you get the super shoes that are ranging around EUR 400 now that makes you run really fast. You don't have those shoes really yet. Do you need that segment to get the Pegasus-like segment sales as well? Or can you skip that part of the market? Or do you need it all?
We're going to need it all. So we are coming with this super fast shoe. It's coming pretty soon. So it will be super cool. And it's very, very fast. So we need it as well. The way into the store is going to be sort of with the road to trail thing. But for sure, again, the asphalt running, the regular running is going to be 50% of our business for the future. And then we need a super fast shoe. So it's coming pretty soon. You're going to like it.
Where is the biggest profit in the market? Is it still the Pegasus because you get bigger volumes there? Or are everyone making a lot of money in these premium segments?
It depends on. Basically, the footwear is a little bit different than the apparel, right? So first, you need to invest in the last and molds. This is basically more machine-made, basically factories in China, right? So all this is molds. I would say the most profitable shoe in the world has to be the Pegasus or the Gel-Kayano, right? Because they'll be using the same sole or same mold for the last 25, 30 years. We're not there yet. So all the investments you're doing in a new shoe, for example, this superb running shoe which is going to be super fast, won't be the most profitable one. The most profitable shoe we have is the one we sell into teamwear and to profile. A lot of big volumes, repeat orders to our factories.
We sell it on the same sole and the same mold and the same every single week. That's the most profitable one.
Will that be a shoe that you're really walking in it? You're not running. You just have it for everyday use?
You could do both. You could do a fair bit of running. I tried it. It's okay. But basically, these shoes for the teamwear are more for the players. They're going to go back and forth to the bus. It's for the coaches. It's for, and we sell it to the promo, for example. It's for people working in the store. You are working as a kindergarten teacher. You need a pair of shoes, right? But of course, you can go running for them. You won't be doing a marathon, but they're good enough for running, yes.
Okay. Yeah. So the 250,000's current, is that produced volume or is it sold volume?
Sold.
Sold volume. That means you are pacing some EUR 15 million in annual revenue currently for the shoes. That means it's like 7%-8% of total Craft revenue.
Yeah.
Okay. Thanks.
Still fairly small. Now, I think that Torsten said in the very beginning, I think one of the biggest uplifts we have for the future is going to be the footwear. Again, the potential in the market is massive. We just need to break it, right? We have good shoes. We have a very good brand. We just need to break the market. A million pairs, meaning EUR 60-70 million in revenue to 2027. With the pace we have, that's going to be reachable.
If I add the targets together for teamwear and shoes, obviously, that's bridged a big part of the EUR 400 million target, so to say, in 2027. How do you see the other platforms contributing to the target?
The probably most important thing for our profitability is going to be the corporate business. The corporate business is going to be double the size as it is today. That's going to mean a lot to our profitability because the mix of margin here is going to be the important thing, right? We're going to see that retail, irregular retail, will be the rest quasi. So basically, that's going to be ending up to these EUR 400 million. We do see that the regular retail business is going to be basically the slowest moving. And the promo is going to be double its size. And that's going to be meaning that we're going to keep up the margins and be even more profitable.
Promising, promising. Germany has been thrown out as the great opportunity for this year. What is happening and how do you see it developing?
I think Germany is super, super interesting. It's for sure the biggest market in Europe, as Tomas presented the past year as well with the opportunity we have in profile. For Craft and the teamwear business, it's a really big opportunity. There are 9 million licensed football players in Germany. 9 million are playing football. I think there are a few hundreds doing cross-country skiing, just a comparison, right? So there's more people doing football basically, or the same amount-ish doing football in Germany than we have living in this country. So it's a great opportunity. Though the competition is tough. We have some really good brands in that market. If Jako can do EUR 160 million and be pretty, no offense, but be pretty unknown, and Erima, a German brand, can do EUR 50 million. So there's some decent competition.
But we also see here the same thing with the other brands. The mega, major brands are doing different things. And we can have a better fit into these markets. So we are up to, again, head to head every single day in Germany and all other countries with Nike, Adidas, and Puma. And somehow, we beat them sometimes. Sometimes they beat us, of course. But they are also making different moves and different strategies. And especially in Germany, we can see that we're going to fit in pretty well.
One final word maybe on North America and the opportunity in teamwear there. You have postponed it once or twice. They're looking for the right entry. How do you see that and how important is that for the 2027 target?
Well, it's going to be important for the future. Then if it's going to be for 2027 or not, the teamwear target, I'm pretty convinced with the pace we have right now in Europe, we're going to be overachieving that target just in Europe, right? The North American market is interesting. We see the same movement and the same way of the way we work here works in the same way in the US. We're being unique with the offer that we have. We are testing the market right now. So we are in the US right now working with one of the biggest clubs on this planet, having more than 100,000 members. It's called FCA, Fellowship Christian Athletes. They are now trying us out. It works very well. We can see that this model we are working with is different. It's unique.
I think Kalle, it's more of a matter of time than when we step into North America. It has to be planned for sure.
That is really after 2027. You might see the big upside that can take the next growth driver if you take it like that.
Yeah, yeah. I think we can step into teamwear in North America before 2027. But we don't have to do that to reach these targets, just so we know.
Thank you. Okay. Then I have a question from the web first. I just wonder how important it is cooperation with different elite teams?
Yeah. As I said in the beginning, working together with different elite teams is important. It varies a bit sort of which category or sport we're talking about. As I said from the beginning, it's very important for, for example, the teamwear business to have this entry ticket into a market. This makes a lot of sense to us. But again, if we are now sponsoring the, if you like cross-country skiing, and I hope you do because then you can see Craft every single day, right? You see that we're going to be on the podium every single day. Of course, they're going to be helping us. We are sponsoring a French biathlon team and the Norwegian biathlon team. They got the most medals in the world championship. That helps us, of course, a lot to be visible. But it also helps us to be better.
We're not just doing that because they're going to be on a big poster in our office. They're helping us to be better. It's pretty demanding, I'm telling you, to work with these athletes every single day because they are wearing our items because they can't even choose, right? They have to be wearing our items. Basically, 300 days a year, traveling in our stuff, training in our stuff, competing in our items. So I'm going to tell you, if it's not good enough, we got pretty quickly emails in the inbox that they're complaining. And worst was bike because there were a lot of complaints when biking. And I can do understand because you do biking for like 15 hours or something. But yeah, that's sort of putting pressure back to us to be even better in development of the items. And we'll learn a lot, of course.
So that's sort of it's important to have visibility. It's important to have sales. We don't do Hammarby for the sake of its fun. That's a big business. Hammarby's merchandise sales will now be 2024 more than EUR 3 million. So we're not just doing that to be, again, a poster on the office. It's a business as well.
Back to the shoes again. You mentioned that it's hard for customers to maybe find the shoes in stock in the stores, if I understood you right. Easier to buy it on your e-shop. Has that been a limitation for expansion globally for you or in?
That's the hardest thing. The brand is good. The shoes are good. We just need to convince first the customer to put it on your shelf if you're a retailer. Then the consumer needs to find it in your store. Today, e-commerce is great. We don't see that e-commerce is going to be the major business for us. If you ask other brands, maybe they think that's going to be the biggest major business for them. We are different. We do believe that can be a supplement. We do believe that we can be helping you as a consumer to find more stuff from us. But we don't mind if you buy it at Intersport or if you buy it at Stadium or on our web page.
So in this case, the e-commerce has been superbly good helping us out to sort of tell you and the consumers, "This is good." But if they're buying at Löplabbet, I'm going to be super happy. So it doesn't really matter where they do the buying, right? So we will never compete with our customers.
Yeah. But has the problem been that, for example, Löplabbet, that they don't have enough sizes in the store, in their inventory?
No.
So that's not been the issue?
No. So at Löplabbet today, it sells well. So consumers go in there. But again, we won't be the first shoe that you ask for as a consumer because we're not on that level yet. So we are really depending on the people at Löplabbet, which we treat very well. We go out running with them every single month, telling them all the things about our shoes. They need to say, "Okay, you need to buy this.
Okay. I get it. But the inventory in the stores has not been the issue. It's recognition that's.
Yeah. It can be hard to get into the store, of course, because they see, "Oh, we don't hear about you before. It's an unknown brand." But again, as I said in the presentation, the trend goes to that retailers need to take more risks because they never know which brand is going to be out or in for next season.
Okay. Got it. Thanks.
Linus.
As you alluded to, in the second step to break into the bigger retailers like the Stadiums, Inter-sports, and so on, isn't it true that there it's been mostly a dropship model this far? You are sending.
Yeah. So basically, what we need to do, and that's why you have these phases, right? We need to be good in phase number 1 first because the bigger chains will not carry you as a brand if you're not succeeding in running specialty. So we need to be good in running specialty first before we run into the other one. Or if we run to the big box one, such as XXL or Dick's Sporting Goods of this world, you won't be selling because no one's going to help you out, maybe if it's a super, super low price. But it won't be that. So we need to do this phase by phase, step by step. And again, 250,000 pairs, it's not bad. But it will be taking some time. But in 2027, we hope for 1 million pair. More questions?
How will Asics and Nike fight back? I mean, it's a disaster for them, I guess, giving this market away. What is their plan, do you think? How will this game play out?
I think you have to ask them. But if I'm going to guess, yeah, basically, they are taking a different road than we are doing, right? I think some of the brands maybe now need to go back a bit and have more retailers again. I think very many brands went too far to say no to customers. I think Nike said no to 30,000 customers, something like that. Meaning that I think they will step back a bit, of course, going back in. But again, if you were the retailer and you were told two years ago, "You're not welcome." And that brand comes back again and says, "Hey, I changed my mind. What about working together again?" Will you then rely on that brand being back with you for real or for a year, for two years, or a season? And this is the thing, right?
So we build the trust together with our retailers. That's why we're not going to compete with them on the e-commerce. We would like to build trust. And the whole New Wave model builds on having stock, supplying, sales rep, being out there, being local, being present. And that's our model for sure. But we need to be innovative. We need to have all this stuff, right? But other brands will for sure, most likely, if they're not succeeding, they need to sort of rewind a bit and sort of go back.
Because I understand, I mean, Hoka has done something fantastic. But how many Hokas is there a place for? I mean.
We don't have to do $1.4 billion. I would love to do that, of course. But I think there's room for 1 million pairs. And I think there's room for more than 1 million pairs. Again, can we be Hoka? Maybe. Owned it in actually shorter time than what Hoka has been doing it. So again, I would love to have these millions and millions of pairs that Hoka has. But I think there's going to be room for more players within this field. And that's what we are aiming for. If we do this, the brand is going to be much more recognized because if we're selling more T-shirts or base layers or cross-country skiing apparel, that won't be helping us as a brand. Because again, the consumer is Googling for footwear, not for T-shirts, not for socks or shorts.
It's important in many ways that we sell more of the footwear because they're going to be sort of driving the brand in the right way.
Is it the big incumbents who will lose market share continuously? Or will you take it from Hoka or from On Running?
I think it's going to be a combination of taking market shares. But I think also of adding on more styles. So running specialty stores today, they carry much more footwear than they did in the past because we are running on different surfaces. We are buying more shoes. We are testing more shoes. So basically, there is room for more brands just because you, as a consumer, would like to spend more money on running footwear. So it's going to be a combination of taking market shares and in sort of the market expanding. And I think we learned something during the pandemic that we need to be healthy and we need to be exercising, right? And running, again, is the biggest activity that people are doing. So it's going to be, I think, a more broader audience.
It's things you can do despite where you live in the world. Even in the poorest countries, the wealthiest countries, the hottest countries, the coldest countries, you can still go running. It's one of these activities that will sort of make that market bigger.
One more question. Then it's coffee time.
Could you please just elaborate a little bit about the margin? What's the margin for Hoka, the On, and what are you looking for in the future?
Well, the margin for footwear is usually slightly lower than what we have in the group. We had, I think, 49% when we closed 2023, Lars. Thank you. Footwear is running slightly lower. But again, the average selling price is much higher, right? So if we get an order from Löplabbet, for example, and if they buy 100 pairs of shoes from us or 1,000 pairs of shoes, that value is going to be pretty high, right? The margin is going to be slightly lower than average. But again, Craft is running on a higher average margin than what the group is doing. So the 49% the group is doing, we are overachieving as a brand with that combination we have today with teamwear, footwear, club, and e-commerce, et cetera.
So I'm not really afraid of the margin because the profile business is going to be increasing a lot, which gives us a high margin. The e-commerce business, steady growth is still like 10%-12% of our total business. And I think that's pretty solid. That gives us some really high margins. The footwear is going to be giving us somewhere around 40%-50%. But again, as we said to John here before, depending on what kind of item we are selling, if we are selling this high-end one and we make one off of it, it's going to be a lower margin. If we do something that we sell a lot of shoes for, this, for example, will be something we're going to have for years and years and years. And this already now is doing +45% in margin. So bear with me.
If you do 100,000 pairs of this, it's going to be above 50%, right? So I think that's sort of the combination. But let's say footwear, the lowest margin. Then the teamwear and the retail margin is around 45%-55%. And then we have higher on the corporate business and then even higher for e-commerce. So that sort of, if you put that all in one mix, we today are achieving higher gross margin than the group is achieving. Great. Thank you very much. Great questions. Thank you.
All right. Are we running? Yes. All right. We have the next guys on the stage. Very happy to introduce these guys. They are new to the Craft family and the New Wave family. So very happy you come the whole way from Denmark today to be with us. It's Rasmus and Jacob. We'll welcome from AGF Aarhus.
A new club that Craft and New Wave have been signing with now. We're going to start working officially from 1st of July, right? Great. Great. The stage is yours. Here's the computer. And please. Thank you.
The mic is on. Yeah. Well, first of all, of course, thank you for the invitation from the whole Craft family. We're very pleased to be here. And I'm not only here to tap this because now there should be a video. And this was actually custom made for EUR 100,000, guys. So I don't know how we'll fix this now. Now, okay. Just joking. This was just to get a little bit of environment about not just running, athletic, or skiing, but the football side of which we come from.
I'm going to tell you a little bit about our city, our club, some academy stuff, infrastructure, and of course, most of all about Craft. That's why we're here. I'll start with that. Then we can end up with questions if you might have some. First of all, we're very proud of the partnership. We've been with Hummel for more than 20 years. That's a very long partnership in football. Hummel, as you might know, is a Danish brand. It's been there for many years, but it's always been in our hometown, Aarhus. So for us, that was, of course, a very big decision to leave Hummel. But the reason we did it was we felt the same passion as we do today. But not only the passion, but we share some of the same values.
We believe strongly that the future will go in for sustainability paths. That also the design and... But mostly we felt that we were wanted. And to be honest, football clubs need to be wanted. So you were talking about multi-brands, global brands like Nike and Adidas before. And we could have them, but that would be a team sport member where there are no designs, special designs, and where you don't feel wanted and where you don't get your deliveries. So just as we signed the contract, well, there's the first truth: can they deliver the design? And we must admit that, and to stay in this room and on this mic, because I know somebody's web, that we don't want to criticize our old friends from Hummel. But it's been very promising from Craft family. So thank you very much.
Tomorrow I'm presenting the new jersey for the board. We are very, very happy to show them this jersey. My name is Jacob. I'm CEO of Aarhus, of AGF. Aarhus, I'm not the mayor, sorry. But that is, as we say, Aarhus. When you are in Stockholm, there are three clubs. When you are in Gothenburg, which I believe is the second biggest city in Sweden, right? There is more than one club, I know for sure. But this city only has one football club as an elite club. We are the second largest city. We are growing every year. We have 1.2 million people within an hour of drive. Remember, Denmark is not that big, but still. We are West Denmark's knowledge and growth center. There is Copenhagen, and then there's Aarhus.
And to be honest, and not to be arrogant or anything, but that is the truth. The growth is enormous in Aarhus. And I live in Randers, which is a small city just north of Aarhus. And we're just becoming a suburban city now. So that is how it is. And I don't think it's just in Denmark. But we have a very young population, big universities, etc. So this was a little about the city if you didn't know Aarhus. About the club, we're actually one of the oldest, not only in Denmark, but also in the world, as a modern football club, based in 1880. We have five Danish championships, and we're the most winning team in Denmark in the cup. As I said, one club city, which means a lot.
For instance, we have 90, more than 99% of all players, all children in our surroundings, they play football in one of our partner clubs. This is our vision, which I also think taps into why we are with Craft. We want to be among Scandinavia's best football clubs. That is not just numbers. That is, of course, on the pitch. I've been looking at Malmö doing incredibly well. To be honest, I like the work of Häcken. But I don't think it's sustainability. That will not be for every year. Copenhagen is doing great in Denmark. That's because they are in a very big market. I think that Craft has made the right decision. So when they want to invest and to go in to conquer Denmark in team sports, it's the right choice. I was not the one selling. That was Rasmus.
But when you talk about brand awareness, AGF has the same brand awareness among Danes as Lego. Okay? So every Dane knows AGF. Because of our history, because of our bad history, a lot of relegations, a lot of bad stories, as it is in football. So for us, we are not just a football club, which everybody says, but we have 6,000 members, which in Sweden would not be many. But we are not member-based as you are here. We are on the stock market. We are NASDAQ. And we are privately owned. We have more than 10,000 shareholders. But only five of them control the club. But they're all local. And you know how it is in the European market, especially in Denmark, actually. There are coming in a lot of Americans, Germans, to buy in football clubs. For not much money, to be honest.
The investment is not much when you look at the size of the company, how many people it touches. But for us, we're very proud of being local-owned. And that is how we want to be felt, to be this part of the city. And the city is a lot for us. Therefore, for us, of this vision, we believe that Craft, which is one of the leaders in Scandinavia for this sports team, not in Denmark, but that is our aim with this project. The strong foundation, that's me in the middle. But next to me is the chairman. He called me almost 10 years ago. Third relegation, it was a joke, to be honest. I was in a smaller club, Randers. So I've been in football all my life. I was educated in Aarhus, one of the universities. And I started in football at the age of 25.
I was with Randers for 12 years. Then he called me after three relegations in 2014. My partnership with him is very good. My CFO, as you can see, has been here for nine years. Rasmus for four years now. So the continuity, which I also feel with Craft, is our bedrock. We have made financial profit now. It's been decades with not just minuses, but also where you need to tell the shareholders for new emissions. Now we look into a profit this year of EUR 10 million. Of course, there's a gap, I think, in Danish kroner. It's DKK 72 million-DKK 85 million. So equal to EUR 10 million. That is because of player sales, transfers. I'll get back to that. But first of all, our fanbase is rising.
Which I also think not just for Craft, but for a lot of our big partners. Our facilities are the most important thing. This is modern times. These are the new cathedrals, like in Stockholm. If you look... and I'll go into... I'll get back to that about the stadiums. Our commercial growth is actually the biggest growth among Scandinavian clubs for the past three years. We're more than EUR 10 million. I did my calculation on the plane. Rasmus didn't know it, but he will hear it now. I believe that when we enter the new stadium... Then from five years' time now, we'll enter in 2026 if everything goes as planned. In five years' time, we will have a sponsorship revenue of SEK 200 million, if the rate is the same as it is now.
So that is very big for a Scandinavian football club. And what has taken Swedish clubs, Danish clubs, and also Norwegian clubs for the last 20 years is the TV money. Okay? The revenue from TV rights has gained a lot. And I believe with all the digitalization, that will be a problem for the Scandinavian markets. So I believe that only the biggest teams with a big market... And that's why I'm very happy that we are one club city. Because you need a market if you want digitalization with your fans. And I believe that the TV market will be totally different than we are looking at today. In Denmark, we just tap Viaplay or Discovery. That's sold to them. And Champions League and Premier League are taking all the money.
And then they even have problems now because the behavior among the young people is not watching live football as we're used to, 90 minutes. So I believe that teams like us, Hammarby, which I look forward to meeting tonight, we need to look into digitalization, how to make our own TV rights, and to keep our customers one-to-one, which we are not good at today, but still better than many others. For instance, Germany is hopeless behind. We're into women's football. We founded it on the top of two other teams in Aarhus, which is actually from the south part and from the north part. So that's good. Corporation into the city. They have a lot of the talented girls. And this is also very important for us. And for me, this is not just about the social responsibility.
But actually, I believe it will be a good investment for us, not just branding-wise or regarding our sponsorships or how we feel. But remember, I don't believe that there will be a lot of transfer in the women's market. But we are a university city. So I know that into athletics, for sure, everybody, every female, every athlete, if they go into sports, they want to do it 100%. But girls playing football, they need a dual career. Not like the boys playing football. They only have one thing in mind with their typical father, that is to be the next Messi. And not many will become the next Messi or Zlatan Ibrahimović. So I think that the market for us, because we are a university city, is still that we will have some of the biggest talents in Danish football in regards to women's football.
About the sustainability, we were actually the first football club in Denmark who hired full-time and who had a full-time agenda in this perspective. So we have this responsibility report, and we make a lot of impact on our biggest partners. And I think that this will also be tested in the future where we need to set standards. So it's not a problem for us with Craft. But right now, we play with a brewery here or with betting or whatever. That will become an issue for us, which we need to take care of as well, or even be sponsored by McDonald's, whatever. But first of all, the environmental sustainability is more important for us present. Our new academy. Actually, 10% of all football players, and that means both the women and the boys, they play in an AGF club.
So these 56 partner clubs that we have around our city are all part of us. And business-wise, we control all the talents. And we are looking, scouting from the age of... And I'm not proud to say it, but that is the market, 9 years old. So we know every player in Aarhus at the age of 9 years. And if we don't know them, they will be taking from other clubs around us, like Midtjylland or even foreign clubs. We have our own facility, which you will see in a moment. So there are only 2 private training grounds in Denmark. That is FC Copenhagen, and it's us. And I believe it's a big advantage for us because it's more efficient than if it's the municipality.
Our focus on developing young talents, if we want to be in the Champions League, if we want just to be part of the European competitions, we need better transfers. We need not only sponsorships, which we are proud of, but these players, the first three players, were sold for EUR 18 million. Look at the age. Right now, everybody buys into very young players. It is only the very big names in Europe who will be sold if their age is 25 or more. We actually sold these five guys last year, which we haven't done in many years. When we won in 1992 in Gothenburg, when the European competition was here, that was a lot of Aarhus players. But then came in Bosman four years later, as some of you might know in the business. That made the transfers in a totally new way.
We were not adapted as a football club back then. We had a big problem. We didn't use the market situation. It's taken a lot of years to rebuild the transfer system in our club. This is the clubhouse. This is only the memberships for the team. But when players come in, if they come from Sweden or if they come from Holland or wherever, they say, "These are the best facilities." I know for sure that facilities and environment is maybe the biggest game changer if you want to develop young people or just to recruit. The new academy will be next to it. Here was the second film for EUR 100,000, but I can't be showing that. Now, as you can see, it's not custom-made. But we use that, of course, when we show and have players.
I honestly also think that I want to tell you that I missed the second spot here. Denmark is overtaking the talent of tomorrow in Scandinavia. We actually have a lot of talents from Sweden. I don't know how many of you are in Swedish football, but you have a problem, okay, with the best talents, I believe. We do a lot of investment, not just in Copenhagen or in Brøndby. Nordsjælland has done a great job, and also Midtjylland. We will as well. We need, when they are the age of 16, they are allowed to go. We need the best talents. Of course, we are fighting with our opponents about the best talents from Norway and Sweden or Finland, especially Iceland as well, because they have the right spirit. That is what is needed on top of our own talents.
Okay, so about the new stadium, we're very proud. This is at the end of the allé. I don't know what is the right name, but that is what the road is called that you might see on the picture. So it's, of course, an old city where at the end, which is more than a mile, there's a church. When you step into the church and look on your right shoulder, you'll see exactly the midline of the pitch. That was very essential for everybody to keep that history. We've been placed there for more than 100 years. Unfortunately, like other sports parks, it is athletic still at the moment. It's tennis, it's horse racing, it's arenas, and it's even biking. You can't see it, but that was from the 1950s.
So this was, of course, when it was built 100 years ago, it was outside the city. And even I'm used to say the Queen's Castle, but now I'll say the King's Castle is just a mile from here. So it's called in Danish Kongelunden. And this is now the budget. So on the picture, you might not see it, but these three guys on the left is the mayor. And then there are two private donators. So they each come with EUR 26 million. So it's Salling Fonden, which is a big, big retailer in Denmark with Føtex, Netto, Bilka. And then Lind, who's a former player, not from the first team, but he made a lot of profit from... What happened? Electricity. Yeah, he was a trader for electricity, which is a big operation in Denmark. And he invested the same from his donation here.
And then we made this long-term agreement. This will be a game changer for us, for sure, in every aspect. And the capacity, we have 19 at the moment, but this is not about capacity. This was, as it's stated here, more about... I know that in Sweden you are... We had athletic stadiums, but we never made the same medals that you did in euros or Olympics or anything. But this was actually built, this stadium, which is the present stadium, was built 24 years ago. Big, big mistake, but the athletic had a big power, influence, political. So in Sweden, Malmö, Helsingborg, Gothenburg, yeah, also Stockholm, of course, have still the athletic stadiums, as I remember. But they built new football stadiums, and that is what we need also. This kills the environment, and we don't have a lot of spectators as we should have.
We believe that we will have sold out when it's finished in 2026 with the capacity of 243000 VIP seats, which is for sure a big, big impact on our sponsorships, as I told before, for SEK 200 million. Our vision was a state-of-the-art stadium of international standards that sets a modern and sustainable framework for our intimate, exciting, and inclusive fan experience. We believe it will be what you see on the left, the red buildings, is handball arenas, small arenas, actually no special public, as I remember. But these are protected, so they cannot be touched. That's why they're still there, not demolished. But other things around the stadium are removed now, and that is what is needed for the fanbase. We'll make this a full-time experience, not just a day experience, half-day experience, then not just 90 minutes.
And most important for Craft, we need a flagship store, of course. We made an agreement with the Danish FA that we'll have a museum, a Danish football museum, which there are none of today in Denmark, although we have been European champions. That will be a part of it. And that is what we believe also, of course, will turn into not just people visiting us on game days, but more every day. Just pictures from a match day. It was an international architect competition. So there were 42 architects from all over the world. And this is Zaha Hadid from London, who designed it and which we believe is very beautiful and we're very proud of. About the concourse, the ball, which you see is one tier. You can't see on the left, that is the hospitality side.
But our vision is to have the best, by far, I would say, VIP hospitality facilities. So I visited a lot of stadiums with Rasmus. And we saw the terraces. This could be from Friends Arena, which is not Strawberry Arena, I think it's called now, right? But when I visited, it was Friends Arena. And there were terraces like this. This is actually from Juventus, from Tottenham. There's a more modern skybox. So you want to be part of your society. You want to be alone, but you don't want to be... You still want to network. So you don't close the door into the skybox. You want to network like this. This is from Tottenham, one of the new stadiums in Europe, or from Manchester City or wherever. So, as you see, we visited a lot of good stadiums around the world.
Yeah, we'll have a lot more space, which is needed. You for sure haven't visited, I believe, but I know our sponsors will look into it. And then we divide our sponsorships, which I believe every football club does nowadays. So we will have three different categories, severity levels. And then we need to be more flexible. So if you visited us, even though that you come in 2026, if you are a member of a football club, VIP, when you've been there 10 times, well, it's like the same, right? So we need flexibility. And that is what we're trying to make with the VIP terraces, but also this tunnel club that you see below. And this is actually our newest inspiration, which we... It wasn't part of the first program of the stadium, but we made it a part of it now. So this is from the U.S.
You know, a field-level box is taking a skybox just down to the ground. Remember, field end is from the US football, right? But we believe it will be like this. So you have the dugout, and then integrated into the stadium is where the players and the managers, head coaches, and just next to that is our new floor boxes. So it will be a skybox where you're on your own and where you'll feel a big part of the game. And you don't see the tunnel club that is also a part of this structure. So we need that kind of flexibility. And a lot of our walls and everything is made flexible. So we will know how to change it so we can change the environment and the experience year after year. We go into the concerts as well. We will only have 35,000.
I think that Strawberry Arena will have a lot more. But remember our market size. So this is 35,000 capacity. And then we agreed with the Danish FA that we will hold international games also. So it's not just Parken. And a game changer for us will be that Parken is old. So it's becoming 40 years old, and it will rebuild. And that will take a lot of years. So we are looking forward to having the international games from the Danish FA all year round. Well, this is our temporary stadium. So we need to be here in 2 years, from 2025 until it's finished in 2026. So minimum 1.5 year with a capacity of 12,000. Well, this is going back to basic, and I think it will be a big...
A big advantage for us in the sporting side because this will not feel safe for, what do you say, for the opponent. The crowd is so near, and we have very good crowd. They are very enthusiastic, but they are not violent. So they could spit on the opponent from here. They are used to running tracks. But we're very proud of this because this will also be a new situation for us, which we need to make as an asset and an advantage instead of just making it, yeah, something that we wouldn't say we could make into this. So that was the words. And then, of course, as I said before, we look very much into the future with Craft. Thank you. Final questions here?
Yeah, thanks. Thanks for an interesting presentation. So can you share us, how long was the sales process?
When did you at first become contacted by Craft, and what was it that ultimately convinced you to sign?
It's been a very long process. So first of all, when you have a cooperation with Hummel for that many years, we actually started this more than one year ago before the signing. So Rasmus and the marketing director of AGF, they started this process actually to find out which path to go. They presented it to me. And I've been here in football for so many years, so I know I didn't want to go with Nike or Adidas if they didn't want us. So I know that you need to speak with them globally, which is you can't. But actually, just next to our clubhouse is a home from Rørsted. So Torsten might know him, but that is the former CEO of Adidas, global CEO of Adidas.
And he's a big fan of us. So that's a Dane living in Germany. And I called him up and said, "Please give me an advice here. Where are we supposed to go?" And he agreed with me, "Don't go with the big names." So that was the first thing. So I think that Rasmus was talking to 10 brands. 10 or
11.
Yeah, brands. And I don't know the details. Rasmus might know that if you want the clear answer about the process. But I know that into the final moment, we had two left. The other was upcoming. They were very... what do you say? They had big football brands. And Craft don't have big football brands first summertime, of course. Or no, they have Hammarby. But in Denmark, nobody actually knows Craft as a football team. So that was a big part of our discussion.
How will the fans look into this? Is it running suit? Because we don't ski in Denmark. The biggest mountain is 50 meters, okay? How will they look into this, our fans? They've been very, very positive. They also want to change this. But one of our core values is we're very proud of the city. So when you go from a headquarters of Hummel, which is a big part of the city, that, of course, needs to be taken into some communication issues. Then we had these two brands left. Craft was one of them. And it was only that we felt more wanted with Craft. Not money-wise, but they visited us. They showed us with the flexibility. And Heine, the Danish sales director, and Kjell, they were there every time. They responded. And that is not...
We're not used to that in this market. That was what I said in the beginning. When you sign, that's one thing. But what will happen next? I think we never experienced that kind of design. I've been there for more than 20 years now. I've never experienced that greater design, but also the flexibility and how it was worked. So I saw Stefan's presentation also about what was in for Hammarby. The design of the jersey means a lot for us now. Custom-made also. So I think that that made us... yeah, of course, the quality. We feel that they are real about sustainability because everybody talks about sustainability. But when we really ask for it, how it can be done, how it can be reused, nobody has the real programs. But we feel that Craft also introduced that probably for us.
Okay?
Jacob, can you put some color on the numbers, your merchandise selling, the amount of replicas and jerseys you are selling every year, etc.? Yeah.
When we started, it was 10 years ago. Remember relegation, everything. We were not popular. We were a joke. But that was 4,000-5,000 a year jerseys. Now we are on 12,000 yearly. And next year we have an aim of 15,000 with you. And when we enter the stadium, then I don't have the number of the jerseys. Rasmus might not know how, but I know the revenue. And that would be like exactly the same number, DKK 3 million, like Hammarby when we enter the stadium. And then remember that in football, there's a big, big, big, big difference into the Champions League because if you go into Champions League, you will become global somehow. I know Malmö and especially Copenhagen has tried that.
So it's not just about your local brand then. I think that that would be a big change for us, even into your Europe League or Conference League. We are still... you know, I think talking about digitalization, I believe that that is a big, big part of it. Not just TV rights or showing happy moments or another social project for a football club. I also think it's about branding and about the jerseys taking into this digitalization.
Great. The ambition for this year, your season starts actually last year because you're doing the reverse season that we are doing in this country. You started in August, right? Yeah, we do, like everybody else in Europe, except Sweden and Norway.
Yeah, so you do the right thing. You had a break. You're going to be starting playing now again here in February. What is your expectations?
What are you aiming for this year?
Well, I'm not in the mood today because we played against Vejle, which is a historic team in Denmark as well, but they are in the bottom. We are number 4 before the game yesterday, but we only draw away in Vejle. And we played... sorry, shitly. We didn't play very well. We had a lot of injuries. We are into the Cup, and the Cup is very, very essential for us. We have an ambition, or we have actually set up goals, a vision of 2025, saying that we need to finish into medals twice. We done it once last year, last season, sorry. We need to go into group stage in Europe. We need to win the Cup again and still be the most winning title holder of the Cup in Denmark. That is aiming for number 10.
We are in the semifinals. So we want to go into the Cup. So even that it's played in Parken and Copenhagen, and we play the other semifinals are Silkeborg or Fredericia. And if you've been in Fredericia, I'll give you a beer right at this moment. That's a very small town in Denmark. They've never been in a semifinal before. But if they go into the final, they won't bring any crowd. So we will have a sold-out Parken with all people from Aarhus. So that's, in my opinion, the biggest. You know, we have a split Superliga. So after 22 rounds, we are only 12 teams in the Superliga, which makes it more competitive. But then after 22 rounds, so we have a double round for everybody, then it's split up, divided into two.
So we have a top six who play for the championship and the European competitions. And then you have the relegation playoffs. The bottom six play for relegation. Number seven will have the opportunity to go into Europe, one game away against number four, playing for the last European place position. So we want medals again, and we want to win the Cup. But if I need to choose, I would rather go for the Cup because it's such a big part of us, and we want to still be the most winning team. Copenhagen also have nine. And we won the Cup in 1996. We haven't won anything since 1996, and we became champions the last time in 1986. So it's the fans are desperate. They are desperate. Yeah.
That's great. Looking forward for some wins together. Exactly.
As you said earlier on in your presentation, you have 56 different member clubs together with you in the academy. I said in my presentation that you need an entry ticket into a market. You said it as well. This is our entry ticket. You're going to be loved from us. Hopefully, you've been feeling that because we really need someone in Denmark to drive in the business. Can you explain a bit more what you think about Craft in the Danish market now when we signed you and are going to start working with you? What is the potential you see in the market for teamwear together with Craft?
Well, I think it's very big. Of course, there is a big competition, and the retail market is under big pressure also in Denmark. So I think that you... of course, it's all about people, right?
So we believe, first of all, that's why we also put New Wave into this. The business-to-business side is very promising for us because we have all these partnerships. Secondly, we have all these memberships, all these partnerships. And actually, we didn't want to launch our cooperation before because we... you said you reused before, Stefan, in your presentation. Well, we have a lot of stocks now with Hummel. So we want that out of the system. We wanted to launch it as late as possible. But you wanted it as fast as possible because you want the new members. And that is what we can help you with. We have more than 20,000, 25,000 members in our partner clubs. And it's all about children, right? Because it's their needs. And I think not only about football tickets or boots, running suits or jerseys.
So you're very powerful regarding the running jerseys and everything. But I think that the team sports, that is where we will help you the most because our brand is so powerful. And that is also being one club city is what we believe is so, so powerful. We have a very, very big cooperation with our brewery, which is Royal Unibrew. And what I believe that even if it's an airport, we have three local airports in Jutland. So we move market capacity. We move the market shares because our fan base, it's not as big as it is in the Stockholm teams or teams like Malmö. But remember, Malmö have been in Champions League. And a lot of these guests in Facebook or wherever it is, or even emails, they don't care about the local. But our... they've been part of three relegations.
They've been through shit with us. So they help us even more. So that is a big, big advantage for us that we move these market shares for our partnerships. But we can't do it. We have 350 partners. But of course, we can only do it with the big ones and the big names and everything. We can't spam our fans. But I think that would be the game changer for you and for us together.
That's great. Thank you very much, Jacob. Thanks for coming here. It's great to have you here. We're going to see you later on for dinner. So that's going to be nice. Next is New Wave Canada. So thank you, Jacob. Big warm applause.
Thank you. Thank you.
The technique with us. We are now having Mark Alexander from Canada presenting New Wave Group Distribution. So please, Mark, you can start. Perfect.
Thank you very much. Very strange. I'm looking straight into my laptop. I don't see anybody. But I hope everybody's having a great day. And good afternoon from Canada. I was listening to the presentation before me. And it was interesting because I heard at the end them talking about the last time that there would have been a win. I don't know if it was for Denmark in football. Just for the record, for any hockey fans out there, it was 1967 the last time the Toronto Maple Leafs won the Stanley Cup. And that's a big deal for us. It has nothing to do with my presentation. However, I know there might be some stakeholders in there, William Nylander fans, who might feel my grief on this end. But in all seriousness, thank you so much for having me today. As mentioned, my name is Mark Alexander.
I am the CEO of New Wave Group Canadian Distribution Inc. A long name. We are the Canadian suppliers of the Clique brand and Cutter and Buck. I assumed the position of CEO in September of 2023. So it's been a short tenure for me as CEO. However, I started with New Wave in May of 2017. That's when the distribution center that I'm standing in right now was nothing more than a dirt floor. That's where my personal journey begins. I really think it's really where the journey of New Wave Group in Canada took off. Next slide, please. So hopefully everybody out there can see the skyline of Toronto, a very famous skyline with the CN Tower in the background, in our dome where baseball is played. I've lived in Toronto all of my life, and it is a fantastic city.
And quite frankly, there is no better place to have a distribution center to service Canada than the greater Toronto area. Our building is 10 minutes from Toronto's main airport, which is a positive on so many accounts. Again, we introduced Cutter & Buck and Clique really in the Canadian market back in 2015, 2014. And Cutter & Buck had been around in Canada for some time. However, it wasn't really until we opened up the distribution center where the business just exploded. And when we did, we knew that there was one thing to do with the distribution center, and that was fill it with product. Next slide, please. So as mentioned, we opened up the distribution center in 2017. It was designed and heavily influenced by the state-of-the-art distribution centers founded in Europe.
Constructed with very narrow aisles, with racking that reached up to 30 feet in the air, really something that is a new approach to warehousing and distribution centers in Canada. We operate Jungh einrich's order picking machines that are wire-guided and GPS-navigated, a total system that was new to Canada. In fact, our system was the first of its kind in our province of Ontario and only the second system run in Canada at that time. So it really was and is state-of-the-art. As mentioned, the location of Toronto or around the Toronto area is extremely critical to our business.
One of the reasons it allows us to service our customers in a way that not all suppliers can do. We are able to take orders up until 5:00 P.M. Eastern Standard Time, our time, and have the orders picked up for in the same day and to be delivered next day in most cases. That's something we came out with right out of the gates, and really put us on the map for success. We live in a 50 km radius of hundreds of corporate distributors and other channel buyers in the area. So not only are we a distribution center that ships product, but we also have a ton of customers who come in on a daily basis to pick up their product from our distribution center.
The most important decision the company made, as I alluded to before, was the investment in inventory. I, prior to joining New Wave Group, had much experience with the corporate market and understood that the critical success of the business really depends on inventory, specifically in the promotional products industry. And stock the shelves we did. Over 800,000 units of inventory were in our shelves the first year. And to put that in perspective, currently, right now, we have about 1.8 million units in our distribution center, more than double than what we had. But to come out and open the doors with that type of inventory really put us on the map for customers. As we know, specifically for corporate promotional companies, if we don't have 5,000 units of what they're looking for, they'll go somewhere else, and they'll go quickly.
Our growth trajectory has been extremely solid, and while we're in a bit of an economic downturn right now, we will continue to grow. I just wanted to reflect on some of those numbers that you see there, those fantastic growth figures. We had one mark there, with the pandemic, that we were affected and rebounded quite nicely. We are still growing at a rapid rate today. Next slide, please. Our vision and our mission is something that we take very seriously. Anytime we are working with new suppliers or hire new staff, this is a document that we put in front of them. We are doing our best to continually improve the North American sportswear experience. Our mission is to delightfully serve our customers with high-quality products.
seems real easy, but as we know, it's not always that easy. Culture is a huge reason why we are so successful. Our idea of continuous improvement in everything that we do and finding efficiencies in everything we do is a culture that has resonated here in our distribution center in Canada. Because of that, our people are the most important investments. We've got fantastic systems and machinery that really allow us to do what we do. But the people that are employed with us here are the real investments, and they're the people that really deliver the products to our customers. Like many others, our future, we believe in sustainable growth, and that is a statement that we work with daily. We have established a company model around it, not only here but also in the U.S., and that is Toward Ever Better.
Next slide, please. So, as you can see with Toward Ever Better, here at New Wave Group Canadian Distribution, Inc., and also at Cutter and Buck Inc. in the U.S., we have a common goal of producing 90% sustainable products by 2025, which is right upon us, and we are right on schedule to produce that. We are committed to sustainability, and we create long-lasting products through sustainable production practices. We focus our sustainability objectives in the three areas that you see on screen: sustainable products, sustainable operations, and sustainable production. Next, please. Our year-to-date sales see us utilizing more than 600 million post-consumer recycled plastic bottles. We know how important that is right now to be in that mix with recycled, sustainable product. It's also been more than five years of zero air freight.
That's inbound freight coming to North America, and we're only relying on sea versus air freight, which we know produces the carbon emissions that we're trying to avoid. Not only that, our marketing and sales materials are all designed to be fully digital, resulting in zero printed materials since 2019. Certainly in our industry, there are many people who need printed catalogs. We give them the files to print on their own. We really take a big stance on this because we know how important it is to be diligent and to stick with something that we truly believe in. Next slide, please. So how do we do what we do? You'll see on screen here; this is an image and a very simple image of our flywheel strategy.
We employ our market-winning product series strategy to achieve consistently high margins from Cutter and Buck and Clique. In other words, high-volume products that will sell not just in corporate, not just in team, but across all of our channels of business. We're not just creating products for specific channels. We have a multi-step process coordinated with New Wave Group sourcing to to achieve a 98% inventory service level objective. So you can see there the cog on that wheel. Inventory service level is extremely important. And as I mentioned before, if we don't have it, they'll go somewhere else. And the beauty of of our service model here in Canada is, again, if we don't have the product for some reason in this distribution center, we are able to bring product, across border from our distribution centers in the U.S.
So there is rarely, rarely an opportunity for our customers to go somewhere else because we will, we'll be able to fill their orders with one of our distribution centers. The Cutter & Buck platform is the combination of these long-lasting products with our capability to direct decorate in our Seattle, Washington, facility for those individuals who are looking for a fully vertical solution. We also focus on expanding the size and the reach of the platform to find more consumers in all channels. In other words, right now in Canada, we believe we're scratching the surface. I know there there are others out there who believe we're only scratching the surface as well, too. Our strategy is about opening more doors.
And again, we're in our very youthful stages here in Canada, and we believe that opening more doors is not only a mandate, but it's an achievable objective for us as well, too. And in Canada, the other important factor is who's selling our product for us. And we truly believe that we have the best sales representatives in all of our channels. We've been very fortunate to recruit the best of the best. So we are continuously improving our efficiency, our productivity, and capacity to fulfill orders more efficiently. That is part of our objective. Okay? And just for an interesting note, over 75%, I believe we're close to 80% of all products that are shipped to Canadians come out of our Toronto distribution center. Next slide, please. Again, how we do it.
Well, our customers, as mentioned, can draw from almost 2 million units here in Toronto and a total of 10 million units across North America. We ship our customer orders out the door the same day if the order is submitted by 5:00 P.M. And again, I covered that before. It is a very, very important objective of ours and a great strategy that we had coming out of the gate. Our closest competitors are not able to do this. We have 20 sales representatives across the country. We've got just short of 2,000 active customers. And again, we're just starting. And out of those 2,000, it's also very important to note that almost 65% of them are in that corporate promotional channel.
With everything that we do, and we're going to be shipping over 1.2 million units of product this year, we've got 12 people working in our distribution center. That is 77,000 sq ft. That's the beauty of the systems that we run and the great people that we have on board. We're able to scale our sales up without having to add to our headcount, which from an operational standpoint is an extreme advantage for us. As mentioned, we are huge on sustainability, and that's something that we shout out to our customers. It's very important to them and their customers.
Yeah, on the side there, you can see 2 industry awards that we won very early in our lifetime, and recognized as the supplier of the year in medium-sized enterprise, for an association called the Promotional Products Professionals of Canada, which is the major corporate association here in Canada. Next slide, please. Again, how do we do it? You're going to see this word, or the acronym MWPS, Market Winning Product Series. These are products that are created not just with one customer in mind. It's with all of our channels in business so that we can take advantage of volume, and we can take advantage of cross-selling within all channels. Again, we strategically work with New Wave Group and specifically us here in Canada. We work with the U.S.
to get well-sourced, well-priced fabric that we can spread amongst all style, many styles, so that one fabrication is not just used for one silhouette. It's used for many different styles across our offering. We create streamlined efficiencies, from product development to sourcing to marketing and selling. And in Canada, our gross margin focus zeros in on manufacturing with duty-free countries, which is extremely important to our business here. And another thing that we're doing is dual sourcing, which means that if we can't get our product all under one manufacturer to satisfy our North American needs, we're looking at grabbing the fabric from one supplier and then using perhaps a duty-free manufacturer in the U.S. And that's duty-free to the U.S. and a duty-free manufacturer, like a Vietnam, that is duty-free to Canada.
So a product that is being manufactured in 2 different locations, with the idea of being duty-free to both countries. Next slide, please. An example of a many market-winning product for us here in Canada is the Stockholm Collection. It is a collection of hoodies and crews, all cotton fleece. It was launched in 2019. And in 2023, a staggering 25% of our overall sales have come from our Stockholm Collection. So notably, it is obviously the biggest collection here in Canada. But it was also the biggest selling Clique series in North America. And to put that in perspective, we were not selling, and the U.S. was not selling any Stockholm in the U.S., a market of 330 million people. That second-biggest-selling rank was only for sales in Canada. Yet from a North American standpoint, it led the charge.
And because of that, needless to say, Stockholm is going to be introduced in the U.S. this coming year. Next slide, please. The Canadian market. Again, I think it's notable here that Canada is the second largest country in the world by landmass with a highly urbanized population. We've got over 40 million people now. 70% of those people live within 160 km of the southern border to the U.S. We've got ties to the U.K. and Europe, but also maintain a strong trade and cultural ties with the U.S. Two official languages in Canada, English, the mother tongue, and of course, French as well, too. And Canada's economy is the ninth largest in the world. We rely on natural resources. And another great note is that there is over 1.2 million small to medium-sized enterprise businesses in Canada.
In other words, there's a lot of customers out there for what we do. The state of the Canadian economy today, I describe it as very uncertain. There have, going back into last year, there have been discussions around a mild recession. However, we don't really plan based on that. We plan based on how do we steal more market share? How do we grow our business? You know, if there is an economic slowdown, how can we still achieve our growth? And we believe that opening new doors is something that not only do we strategize every year, but we raise the bar every year as well, too, to open new doors for us. Next slide, please. So I've mentioned a couple of channels of business. We really focus on four of them. I mentioned corporate.
We also do team business, and team business is more associations. It is definitely at the amateur level as well, too, whether it is soccer/football or hockey, which would be the main two sports within the Canadian marketplace. We also have our legacy golf business as well, too, and our specialty retail business, which include big and tall, destination retail, touristy type of retails, and our business to consumer platforms, which is fulfillment business from our distribution center to end users, using a different marketplace platform. Next slide, please. If we look at the corporate channel of business, which, as mentioned, is our largest channel of business and will be the largest channel of business with the biggest opportunity, it's growing every year. The corporate clothing market represents over CAD 400 million annually here in Canada.
At New Wave Group Canadian Distribution Inc., we've got just short of 4% market share based on our estimations. So we have a tremendous amount of room to grow. Another interesting fact is that British Columbia, Ontario, and Quebec, and it's really the latter, too. Ontario and Quebec account for over 80% of Canada's corporate distributors. And if you really take a look at the Toronto area, that is really the hub for English-speaking Canadians, corporate Canada. And then, if you go across the border into Quebec, Montreal is really the French-speaking corporate corridor for Canadians. So that's really why you see Ontario and Quebec as the where most of the business is done. Our success has been the ability to bring a brand like Cutter & Buck and have the inventory levels needed to be successful.
That's really important, because there are many other brands who, for years and years and years, wanted a piece of the corporate business. However, they consistently disappoint distributors and end users with the lack of inventory. It's not part of their business model like it's a part of our business model. And, pair that with the offering of our Clique brand, and it's been a fantastic recipe for success here. Next slide, please. So, as I mentioned, the Canadian team, it's really a dealer market, and that's a part of the business I get very excited about. We have a tremendous opportunity, specifically with the Clique brand. There are thousands of sports associations across Canada that have the potential of bringing Clique in for their players and coaches. And you'll see a vest on the screen. That's our Hudson's vest from Clique.
I was happy to see when I was picking product for my daughter's hockey uniform last spring that this was one of the offerings, so that the logo you see here on their chest there is from the Central York Panthers. Again, they're having an up and down season. If anybody's interested in the 15-year-old girls, nonetheless, it's, it really is a culture here in Canada, where these associations take a life of their own, where friendships are made, where team building happens. And at Clique, we really have an opportunity to be to be a part of that story. Next slide, please. Cutter & Buck's legacy in Canada began with the golf market. This was a foundation that was laid in the late 1990s and 2000s. We have over 2,000 golf courses in Canada.
And there's a great opportunity, not just for retail with Cutter & Buck. Our biggest growth engine is outfitting the golf staff, the operations team with Clique product that looks great and fits their budget. So I would say that the biggest growth trajectory for our golf business has been outfitting many golf courses across the country with their staff needs. And we continue to really, really make sure our sales force continues to sell in that manner. Okay. We've also got great partners in specialty retail, and we had a really, really great success story this past year and a half. Hudson's Bay Company, which is one of the biggest, if not the biggest, retailer in Canada. We're on their online store, and we very quickly became one of Canada's favorite brands, just based on straight sales and positioning on their platform. Next slide, please.
So what does the future hold for us here in Canada? Well, I've mentioned, there's a lot of opportunity. There's a lot of doors to open. There's a lot of growth still here. And one of the things that I truly believe is, we've built the operational infrastructure that can host other New Wave Group concepts to the mix here. We really see ourselves in Canada as the core New Wave Group corporate hub for Canada. We've got the expertise. We've got the people, and we've got the infrastructure here to not only make Cutter & Buck and Clique a success, but to potentially bring on other New Wave Group brands to offer to corporate Canada as well, too. And if you go to the last slide, it's simply a thank you, and appreciate everybody's time.
If there are any questions, or I'm not sure there's any time for questions, I'm more than happy to stay on.
There is time for questions. So any questions here? Audience? Seems to be crystal clear, Mark.
Well, that's good. Yeah, I appreciate it.
Thanks for your time.
Thank you very much. I wish everybody a great rest of the day, and a great dinner as well, too. I hope to see you.
Open it up, Michael. Yep. Okay. A short summary from my side there. I know that some of you that will stay really waiting for the gin tasting. Same as myself. So no problem. So I can start with that, actually. The gin was competing in London in the big gin festival a couple of weeks ago.
We competed in 3 different categories, and we had a silver medal in 2 of them. Quite nice for a new company, actually. What we haven't talked so much of today is actually what I find is one of the absolutely most exciting things in New Wave. Here you see a product that has been profitable for the last 35, 40 years in a business area that are almost not 20 already, loss. I'm talking corporate, and I'm talking the basic products. Quite often in the past, not so much any longer, we had a lot of questions about the stock. This is a typical product on the stock. It looks like that today. But how can it look tomorrow? I mean, no products are branded in our warehouses.
There can end up with anything from Hummel to US Open to ABB or whatever. The key is to have it on stock. I will give you a true story. I sold New Wave, half of it, I should say, in a new issue of shares, 1997, to a local investment company named Resultatgruppen. Then we had the first. That's 1988. We had the first CEO meeting. They were damned angry on me because I tied up too much capital in stock. So they wanted to take that down. When I should try to defend myself, I said that you should know one thing, that having it on stock is more safe than money in the bank. I guess you know what happened with the banks 1989, 1990, 1991, but not with us.
Another strength that we haven't talked about is actually the number of clients and resellers we have. I quite often get the question, are you depending on one client, depending on what one product, and so on? If you look at the corporate side, which this is, I don't even know what the biggest client counts for in sales. Probably 0.00001% or something. So it's a very stable market. 47 retailers or partners in Europe, 23,000 in U.S., Canada. I would say we should be able to go to at least 80,000 in Europe and the same amount in U.S., Canada. So it's a lot of growth left also in existing markets. The interesting thing is also here that those resellers or clients to us, they have hundreds of millions potential end users. I mean, each client is probably having 100, 200, 500, 1,000 clients.
So it's very, very big opportunities here. That was basically how I wanted to end this day. But I will be happy to answer any questions. And what we have tried to do is to give you a flavor from different geographical areas, different business areas. And it's always the same that Craft, which I find very exciting and I love. But they also always get a lot of questions about products and everything. I don't think I've heard one single question today about the one-color T-shirt or sweatshirt. And I want you to remind you about that. 35 years in profit. So I open up for questions if you have any.
Thank you, Torsten. Perhaps you could give us a timeline for this new margin target that you set out.
Maybe if you can think about the sort of we call it bull case in the market, the positive scenario in how quickly you could reach it, and more a base case scenario.
It's a very, very difficult question. I mean, we would absolutely not have raised that goal if we were not sure it's reachable. But, for example, just take right now when we acquired BTC one and a half years ago. What is it? Large SEK 700 million turnover. Operating margin on 7%. We acquired Tenson. No operating margin at all. So, I mean, that burns. So I think that we should see if we can find one way or some way to report how the existing business right now develop and what is new establishment and what is new acquisitions.
Because I don't want to come into that position either as a CEO that I see a company selling for $100 million but with 2% operating margin. And I'm sure we can improve it and reach 20% in that company on 5-6 years. Then I don't want to come to the situation that we don't buy it because we should show 20% profit if it's a good deal. So we should try, Lars, to find a way to make it more clear. But for existing companies, I would say that, I mean, we are almost there, actually. So if we get some better economy, and especially on retail, that it recovers a bit from the sports retail, it shouldn't take too long time.
So 2025, I hear you saying.
Yeah, maybe.
Now, but this is difficult because we, as a management, we, of course, always want to satisfy the stock market, hopefully every quarter. But we're also responsible for what happened from 2 years on now, 3 years on now, 4 years on now. And it's, I would say, if we stop investing and we didn't care about what the growth will be 2027, 2028, 2029, I think I could promise you 20% margin within 24 months. But if Stefan does not start looking at indoor shoes or other shoes and so on, we have nothing to grow with in the next step. And that's a tricky thing to balance all the time.
You mentioned Stefan. Will you allow him to enter the U.S. teamwear market before 2027?
Yeah, I think so. But again, now focus will be Germany. And we believe strongly in Germany.
We have started testing in the U.S. But I think that we do a mistake if we spread it out too much. So I would prefer higher investments regarding cost in Germany, and then wait a little bit more with U.S. But 2027 is three years from now, so I guess so, yes. Thank you. Any more questions? Everybody's waiting for the gin, Lars.
I think so. I think so, too.
So be on the air. Okay. I hope you have had a nice day and if you have learned much more about our business and our different operations. Some of you have joined the Capital Markets Day last year. And then you have met the big part of our management, actually, because then we had Cutter & Buck and we had ProJob and so on. So that's it.
I promise you we will do everything we can to create a much, much more successful company than we are today. Thank you very much.