A discreet multinational from Zug, Odlo is a brand known to sports enthusiasts. The world leader in sports underwear has kept a part of its Nordic soul as it is managed by Norwegian Knut Are Høgberg. A CEO who greatly appreciates the quality of the workforce and the high Swiss mountains.
This content was posted on May 13, 2022 – 09:11
Founded in Norway over 70 years ago, Odlo has been based in Hünenberg, in the Zug countryside, since 1986. In addition to sports underwear, Odlo is also very active in clothing for hiking and running.
Through six subsidiaries and 8,000 points of sale, Odlo products are sold in around forty countries worldwide. Meeting in Hünenberg with Knut Are Høgberg, CEO of Odlo for four years.
Knut Are Høgberg has led Odlo since July 2018, after serving as Chief Operating Officer and Executive Vice President for approximately three years. Previously, this Norwegian was for eleven years a consultant at BCG, a prestigious global management consulting firm. Knut Are Høgberg also spent eight years in senior management roles at Helly Hansen, a Norwegian company specializing in the manufacture of marine and snow textiles.
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swissinfo.ch: As a foreigner who has lived in Switzerland for seven years, what still surprises you in the host country?
Knut Are Høgberg: I really appreciate the beauty of the Swiss mountains and their accessibility to the public, for example thanks to the many cable cars. In Norway, our mountains are lower, but just as beautiful; on the other hand, our climate is much harsher and our mountains are much less accessible.
Was it just for tax reasons that Odlo moved its headquarters from Norway to Hünenberg in the canton of Zug in 1986?
No, at that time Switzerland was our main market, mainly thanks to the dynamism of our local distributor based in Hünenberg. It is therefore natural that Odlo decided to get closer to its main customers.
Are you still happy that you chose Switzerland to set up your company’s headquarters there?
Basically, yes. In any case, we see ourselves as a fully Swiss company and moving our headquarters again is simply inconceivable. In Switzerland, we appreciate the availability of talent across our lines of business, in particular thanks to the presence of companies comparable to ours. I am thinking, for example, of Mammut and On.
In addition, we sometimes cooperate with certain faculties, for example the Swiss Federal Institute of Technology Zurich (ETH) or the Federal Materials Research and Testing Laboratory (EMPA). Swiss costs are obviously high, but this is offset by the quality of the workforce and, in Zug, competitive taxation.
Odlo employs 740 people worldwide, including around 100 in Hünenberg. What functions are in your seat?
Our headquarters in Zug houses most of our personnel functions (general management, finance, human resources, IT). In addition, our teams in Hünenberg take care of sales, marketing and product management. Finally, other colleagues at Hünenberg are responsible for our supply chain, sustainability and innovation.
In which countries do you generate most of your innovations?
Everything goes through Hünenberg but we collaborate with several foreign suppliers. As far as fabrics are concerned, our main suppliers are based in Portugal, Italy or Taiwan. As for apparel, our main suppliers are in Vietnam and Thailand.
And your production strategy?
Our approach is atypical in our industry as we produce more than half in-house, mainly at our factory in Romania. To better control our supply chains, we intend to further increase our in-house production rate.
“We produce more than half in-house, an approach that is unusual in our industry”
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Its products are marketed in about forty countries. How do you foresee the continuation of your international development?
Currently, we are mainly present in the Alpine markets, in particular in Germany, Switzerland and France, but also in Italy and Austria. In these countries, we are leaders in sports underwear and our market share often exceeds 50%, while our competition is very fragmented. Our priority is to strengthen our presence in these five countries, with particular emphasis on our walking and running products. As for distribution channels, we rely heavily on our own website.
How important is e-commerce for Odlo today?
For now, our products are sold primarily through retailers such as Ochsner Sport. However, our e-commerce site has considerable growth potential. In addition, some of our retail partners list our products for sale on their own websites. When selling directly on the internet, we are naturally in competition with our retail partners, but today they fully admit that a brand like ours is involved in e-commerce. In addition, customers of these retail partners often use our website as a source of information about our products.
What are the other challenges of your direct internet sales?
At first we had a lot of feedback because of incorrect sizes, but over the years we managed to overcome this difficulty. Our main challenge today is to attract more and more traffic to our website and convert these virtual visits into purchases. It’s getting more and more expensive as sites like Google keep increasing their advertising rates. But we also rely on other means to generate customer traffic, for example, the registration of our visitors.
Its products are also on sale at some points of sale, for example in Foxtown (Mendrisio, Ticino). With what return?
These outlets are very useful for selling our unsold items; in addition, a significant part of our clientele is a fan of this type of business.
For the coming years, what are the main challenges for Odlo?
We strive to increase brand recognition and preference. For this, we are implementing joint actions with our retail partners, in addition to taking advantage of our multiple points of sale and our website. Strengthening our brand is a big challenge and a big opportunity because most of our new customers remain loyal to our brand.
In the recent past, you have also sponsored the Swiss and French ski federations.
Indeed, but we have come to the conclusion that it is wiser to invest in influencer athletes. In this way, it is not only possible to increase the visibility of our brand, but also to explain the strengths of our products. To assemble this new strategy, we are closing deals with a combination of established athletes, former glories and young hopefuls.
In May 2020, Odlo was acquired by MOntario Rosa Sports Holding. What were the synergies with the other companies in this investment fund?
We were the first sports brand acquired by Monte Rosa Sports Holding; therefore, we have not yet benefited from significant synergies. However, we have just acquired the Norwegian company Janus, which specializes in the manufacture of wool. As we have complementary production tools, we intend to collaborate in this area. In addition, by combining our purchasing volumes, we will also negotiate economies of scale with our common suppliers.
Odlo highlights its environmental and social fiber. What are your concrete actions?
Regarding sustainability, we have three main goals. Firstly: we want 80% of our products to be manufactured in Europe because that is where our main markets are; in this way we can reduce our carbon footprint. Second, in our Romanian factory and in our warehouse in Germany, 80% of our energy must be produced with solar panels. Third, 80% of our raw materials must be natural or recyclable; for example, the polyester used in our articles is already produced from recycled PET bottles.
What is the impact of the rise of “slow fashion” on your business?
Our products are designed to last for many years. We can therefore say that we have been followers of “slow fashion” for a long time.
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