Sanita Footwear, the Danish producer of clogs had a negative result of 6.5 million Danish kroner (€0.87m-$0.98m) in 2018, compared with net income of DKK 36.2 million in the previous year. While sales and results were relatively positive in Europe, Sanita took a hit in the U.S. due to the winding down of its former distribution set-up in the country, which led to an almost complete loss of sales during the second half of the year.
In order to pursue a different go-to-market strategy for the U.S., Sanita decided to separate itself from its former American distributor in Houston. To focus on supporting its American retail partners, it hired a new distributor, M. Leonard International, based in Maine, starting last October. The company is owned and headed up by Matt Tracy, who has many years of experience and a good track record in building up shoe brands in the U.S. Notably, he worked previously for Giesswein.
To achieve satisfactory profitability levels, Sanita has decided to merge its two specialized Polish factories into one unit, a move that is expected to be fully implemented at the start of 2020. The plant will be located in Pila, which was also the location of the original clog factory.
Charges related to the relocation of the production were already accounted for in the results for 2018, resulting in extraordinary charges of DKK 4.7 million (€0.6m-$0.7m) when added to the change of distribution in the U.S. Adverse foreign currencies also had an impact on the results. Because of the reorganization, further losses are expected for this year on a turnover of around €15 million.
Sanita makes clogs in own factories in Poland under the Sanita brand, using only European materials. Although the turnover is almost equally split between Europe and the U.S., the product mix is different. The company sells mostly clogs with PU-injected soles to the American professional, medical and leisure markets under the Sanita brand, along with workwear and safety footwear. In Europe and Japan, Sanita sell mainly wooden-sole fashion clogs.
Sales, design and management are based at the company's Danish headquarters in Herning, where Sanita was originally founded back in 1907. The chairman and major shareholder of the company is Jesper Klein, a well-to-do man with a background in venture capital investment. The chief executive is Carsten N. Christensen, who has almost 20 years of experience with Sanita.