Bjorn Borg AB: A High-Conviction Growth Play in the Global Sports Fashion Revolution

Bjorn Borg AB (FRA:6BB) is undergoing a strategic metamorphosis that positions it as a compelling long-term investment in the global sports fashion sector. With a clear focus on accelerating e-commerce growth, expanding its sports apparel dominance, and capturing market share in Germany, the company is leveraging its strong brand equity and operational agility to outpace competitors. For investors seeking exposure to a brand with a unique blend of heritage, innovation, and scalable digital infrastructure, Bjorn Borg AB offers a rare combination of near-term momentum and long-term vision.

E-Commerce: The Engine of Scalable Growth

Bjorn Borg's e-commerce segment has emerged as the cornerstone of its growth strategy. In 2024, the company's own e-commerce platform grew by 26%, significantly outpacing industry averages. This digital-first approach is not just a response to shifting consumer behavior but a calculated move to capture higher-margin direct-to-consumer (D2C) sales. The company's 40% year-over-year growth in sports apparel e-commerce underscores its ability to monetize the rising demand for athleisure and performance wear.

The strategic shift to e-commerce is also reshaping margin dynamics. By reducing reliance on wholesale partners and optimizing logistics, Bjorn Borg has maintained a gross margin of 51.68%, a critical buffer against inflationary pressures. The company's investment in personalized digital experiences and omnichannel integration further strengthens customer retention, a key metric in an era where brand loyalty is increasingly tied to seamless online interactions.

Sports Apparel: A High-Growth Anchor

Sports apparel has become the linchpin of Bjorn Borg's product strategy. In Q2 2025, the category saw a remarkable 45% growth, driven by product innovation and a focus on premium, performance-driven designs. The company's ambition to achieve SEK 1.5–2 billion in sports apparel sales within existing markets reflects its confidence in this segment's scalability.

The brand's ability to blend heritage with modernity—rooted in the legacy of tennis legend Björn Borg—creates a unique value proposition. Unlike generic athleisure brands, Bjorn Borg's design philosophy emphasizes timeless aesthetics and technical functionality, appealing to both casual and serious athletes. This differentiation is particularly valuable in Germany, where the brand now ranks third in consumer consideration, trailing only Nike and Adidas.

Germany: A Strategic Bet with Massive Upside

Germany represents the most critical frontier in Bjorn Borg's expansion. The CEO has described the market as “as large as all other markets combined,” a testament to its potential. Despite challenges with distribution partner Salando, the company has executed a phased, localized approach, starting with a strong foothold in Hamburg. Sales to German consumers via its own e-commerce channel have surged by nearly 30% year-to-date, with growth in Hamburg alone doubling.

The brand's grassroots marketing efforts—such as the Midnatsloppet (Midnight Run) in Stockholm, where 30,000 participants wore Bjorn Borg-branded gear—have amplified brand visibility and emotional engagement. These initiatives, combined with a digital-first strategy, are creating a flywheel effect: increased awareness drives e-commerce traffic, which in turn fuels sales and brand equity.

Financial Resilience and Long-Term Vision

Bjorn Borg's financial discipline is a key enabler of its aggressive growth. The company maintains a healthy equity/assets ratio of 35% and a return on equity of 23%, reflecting strong capital efficiency. Its long-term goals—10% annual sales growth, a 10% operating margin, and a 50% dividend payout ratio—provide a clear roadmap for sustainable value creation.

While footwear sales dipped in Q2 2025, the integration of the recently acquired footwear business is expected to reverse this trend. The D2C channel, where footwear growth remains robust, offers a clear path to recovery. Management's confidence in this turnaround is well-founded, given the brand's strong digital infrastructure and growing consumer base.

Investment Thesis: A High-Conviction Play

Bjorn Borg AB's strategic transformation aligns with three powerful tailwinds: the global shift to e-commerce, the booming sports apparel market, and the untapped potential of Germany. The company's ability to execute on its vision—balancing brand equity with digital innovation—positions it as a rare growth stock with durable competitive advantages.

For investors, the stock's current valuation offers an attractive entry point. With a market cap of ~SEK 1.5 billion and a forward P/E ratio that lags behind its growth trajectory, Bjorn Borg AB is undervalued relative to its potential. The company's focus on high-margin D2C sales, combined with its strategic expansion into Germany, creates a compelling case for long-term outperformance.

Conclusion

Bjorn Borg AB is not just adapting to the future of sports fashion—it is defining it. By doubling down on e-commerce, leveraging its sports apparel expertise, and capturing Germany's vast market, the company is building a global brand with lasting relevance. For investors with a 3–5 year horizon, this is a high-conviction opportunity to capitalize on a brand that is rewriting the rules of the game.

Investment Recommendation: Buy Bjorn Borg AB (FRA:6BB) for its scalable e-commerce model, strong brand positioning, and strategic expansion into Germany. Target price: SEK 120–140 (based on 12x 2026E earnings).