NWG Annual Report 2019 - EN NWG Annual Report 2019 - EN | Page 33
NWG // GIFTS & HOME FURNISHINGS
Sales channels
Most of the segment's sales are in the sales
channel retail (87 %). Swedish retail has
for some time undergone and undergoes
a major restructuring in which the consu-
mer's interest in the traditional glass
and porcelain trade is diminishing in
favor of design and interior stores. The
development of e-commerce is another
strategically important part where the
customer's changed trading patterns
require a completely different accessibility
than before. Brands such as Kosta Boda,
Orrefors and Sagaform have an esta-
blished position in the retail sector and
have the opportunity to make sales both
in the traditional way and through e-com-
merce. A growing part of the segment is
Destination Kosta, where all sales belong
to the retail sales channel. Part of the
sales for the Kosta Boda, Orrefors and
Sagaform brands are made to the promo
market, where the products are used as
everything from simple gifts to exclusive
gifts for jubilee or memorable occasions.
Kosta Boda and Orrefors retain their
position as interesting brands on occasions
when you want to show appreciation with
objects of more high-quality character.
Sagaform's products are in demand as
Christmas and summer gifts for employees
and customers. The sales channel promo
places demands on high service level and
availability. For example, a company that
orders Christmas gifts for its employees
or customers depends on the supplier
being able to deliver on time. If New Wave
Group fails to do this, then the customer
will choose another supplier. The Group's
objective within promo is to deliver 98 %
of its products within 24 hours.
Capital tied up
Production for Orrefors and Kosta Boda
takes place throughout the year, while
sales mainly take place during the
second half of the year. Capital tied up is
thus greatest during the first part of the
year. Most of the production is classic
and great-selling product series such as
Château, Intermezzo, Line, Mine and
others, which in many cases has a product
cycle of more than 20 years, which limits
the risk of obsolescence. For the part that
is not self-produced, most of the purchases
are made against stock for resale to the
customer. It normally requires a higher
capital tied up in inventories for promo,
as this is a prerequisite for success within
this sales channel. However, the risk of
obsolescence is low, as a larger part of this
range is timeless basic products where
there is a demand season after season.
Most of the products are also common to
the sales channels promo and retail, which
contributes to a risk spread. Price adjust-
ments for changed purchasing prices are
made continuously and the currency risk
can thus be limited.
Sales are made to selected retailers
and credit losses are low. However, there is
a higher concentration to a fewer number
of retail customers compared to the promo
market. In 2019, the confirmed credit
losses in the operating segment amounted
to 0.48 (0.31) % of sales.
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