New Wave, a prominent profile clothing company, has experienced turbulent trading over the past year, but the company may finally be able to put that behind it. Following the Q4 report, the stock saw a significant increase in trading despite the ongoing market challenges.
“I started selling in the sports retail industry in 1984. I have never experienced three consecutive years of negative numbers for the industry. Yet, we are holding our own quite well and even seeing some growth in retail,” says CEO Torsten Jansson to Affärsvärlden.
Although Jansson cannot predict when the market will turn around, it has certainly taken longer for the market to recover than he had anticipated.
“It would be almost illogical if the market does not improve at all during the third or fourth quarter. Because then interest rate cuts and other measures would be of no use at all. I find it hard to believe,” Jansson remarks.
Moreover, there are signs of a better economic situation, prompting Jansson and New Wave to slow down their investment pace, which had been maintained during the tough years. In Q4, investments increased to nearly 287 million SEK.
“We will not continue to invest, and in that sense, I actually think it is wiser to invest in a tougher economic climate,” says Torsten Jansson, adding, “If you have the means and a strong balance sheet, I think these are very good times to invest now.”
When it comes to acquisitions, Jansson has looked at more companies than he can count during the quarter, but he is not interested in buying companies just to show growth. Geographically, the Nordic region is out of the question due to New Wave’s market share.
“With the market shares we have, it would almost become a problem,” Jansson explains.
Jansson also anticipates that there will be companies that may be forced to sell or need to raise capital.
“I feel that it doesn’t matter if we bide our time until we find the right fit,” he says.
Despite the new agreement with the Swedish Table Tennis Association, acquiring Stiga is still not on the table for New Wave. Jansson envisions potential collaborations with Stiga, particularly in sales on certain markets where Stiga’s hardware and Craft’s clothing could be sold together.
At the same time, Jansson emphasizes in the interview that within the sports segment, New Wave should focus on textiles.
“I have no experience with tables, protective gear, rackets, or balls. So, it would be a pretty big step to acquire that type of company,” Jansson acknowledges.
The collaboration with the Swedish Table Tennis Association holds a special place in Torsten Jansson’s heart. He played table tennis in his youth and was on the verge of starting to compete again in 2012.
His signature move was the forehand loop: “an over-rotated forehand shot where you take the ball lower and then you have a pretty strong rotation when you hit it.”
Now, he has resumed training.
“I’m taking it slowly, and the goal is definitely to start playing more,” Jansson says.
The CEO even jokes about the possibility of a match in the office, noting that he has overcome his aversion to losing.
“I have come to terms with not liking to lose. Now, one can accept that they are not as good,” Jansson laughs.
In a volatile world, the market is uncertain, and Jansson finds the situation challenging to assess.
In general, I think the stock market can go even higher as long as interest rates are at this level, but a lot depends on what happens politically,” he observes.
Jansson admits that he spends too little time on the stock market, as all his time is devoted to the company. Nevertheless, he has increased his investments in Volvo, Swedbank, and Handelsbanken.
“I believe in the companies that I believe in. You can sell banks and put the money in a savings account. But it doesn’t feel attractive with the interest rate you get compared to the dividends and returns on bank stocks. I always think a good company is always good,” Jansson asserts.
According to the shareholder service database Holdings, Torsten Jansson sold shares in New Wave in December. It remains his largest holding, with shares worth nearly 5.3 billion SEK in the company. In addition, he has only increased his holdings.
“I never really engage in short-term investments. Trying to time the market – buying as cheaply as possible and selling at the top – is extremely difficult. Looking at it from a slightly longer-term perspective, if there is a sharp decline… it is a good opportunity to buy more shares instead and average out the price to a lower one and be part of the next upswing,” Jansson explains.