Sports Group Denmark’s Strategic Roadmap: Navigating Bangladesh’s RMG Sector for Market Expansion

Sports Group Denmark was founded in 2012 by CEO Bjarne Jeppesen, a Danish innovator and entrepreneur. When he founded Sports Group Denmark, he had more than a decade’s experience with business management and sportswear development from previous leading positions in Asia. Sports Group Denmark took things to a new level in sportswear development- and distribution. The goal was to provide great quality sportswear at affordable prices. But high quality and low prices don’t always go hand in hand, however, Sports Group Denmark knew exactly how to build the required setup to make it possible. Together they made a great effort to achieve this goal, and it’s fair to say that the effort paid off – fast!

Since its start in 2012, the company has grown extremely fast and is today one of the biggest Sportswear companies in Scandinavia – each year exceeding expectations, expanding employees and product range to what it is today. Through the years the company has established nine offices in Scandinavia and Europe, and in our primary production country, China. The industrious and innovative mindset is reflected in all employees of the company. Every year new ambitious goals are set, and everyone works hard, is committed, and dedicated to achieving them. Recently Team Textile Focus met Jan Rossel who is serving the role of Sourcing & Country Manager- Bangladesh, Sports Group Denmark. Key discussion points are mentioned below for our readers-

Figure: Jan Rossel, Sourcing & Country Manager, Sports Group Denmark

Textile Focus: How do you see the economic growth of the Bangladesh RMG sector?

Jan Rossel: From our viewpoint, we see Bangladesh as a significant player in the current global economic landscape. China’s decline has led to a shift in customer movement, and while Bangladesh isn’t the sole beneficiary, it stands out as a major alternative. The Generalized System of Preferences (GSP) advantage, especially for European customers, has contributed to the growth of the Ready-Made Garments (RMG) sector. Additionally, Bangladesh’s focus on social compliance and environmental initiatives aligns well with the priorities of our company and many other customers.

Textile Focus: Could you provide insights into your current agenda for the Bangladesh market and your strategy for increasing orders?

Jan Rossel: Sports Group Denmark currently sources about 5% of its total buying volume from the Bangladesh market, aiming to increase this to 20-25% in the next two years. With a diverse product range beyond apparel, including footwear, hard goods, and various sports-related items under 29 brands, the company has experienced rapid growth, averaging 40% annually for the past 11 years. Challenges in FW23, attributed to the war in Ukraine and post-Covid dynamics, are seen as temporary, and the company anticipates a return to growth. The CEO envisions the Bangladesh office growing from $5 million to $25 million in US dollars FOB volume per year. Despite geographical challenges in dealing with Chinese suppliers, Sports Group Denmark maintains a close relationship with its Bangladesh suppliers and is actively involved in finding suitable factories. The company’s success and optimistic outlook reflect its commitment to the Bangladesh industry.

Textile Focus: How does your company plan to navigate these challenges and maintain a fair pricing strategy?

Jan Rossel: We acknowledge the importance of fair wages and understand the challenges faced by manufacturers. While we support the idea of a living wage, there’s a delicate balance because end consumers often resist price increases. We are exploring options, such as negotiating with our Chinese fabric suppliers for stable polyester prices. We have also proactively introduced buffers in our pricing strategy to mitigate potential cost fluctuations. Our commitment is to support the industry while ensuring the sustainability of our business.

Figure: Mohammad Ashraful Islam, Editor, Textile Focus; Jan Rossel, Sourcing & Country Manager, Sports Group Danmark; Md. Rakibul Islam, Manager, Textile Focus

Textile Focus: How does your company engage with factories in terms of social compliance, environmental sustainability, and ethical practices, especially considering the recent developments in Bangladesh?

Jan Rossel: We maintain a close relationship with our suppliers in Bangladesh. Regular communication and frequent visits ensure a strong understanding of the working conditions and practices. Our company has a comprehensive ESG (environmental, social, governance) strategy, with BSCI as our benchmark. We aim to collaborate with factories that embrace sustainability, including initiatives such as rainwater harvesting, solar panels, and waste reduction. While we recognize there’s a long way to go, both our company and the factories in Bangladesh are making progress in adopting more sustainable practices.

Textile Focus: How do you see the overall market, economy, and business environment in Bangladesh?

Jan Rossel: Bangladesh has made significant progress, especially in the last 35 years. While it remains a developing country, positive developments are evident. Infrastructure improvements, such as new airports, flyovers, and elevated roads, are notable. However, challenges, such as traffic congestion and port delays, persist. The RMG sector plays a crucial role in Bangladesh’s economy, and there’s potential for further growth. As the country continues to develop, a focus on infrastructure and support for key industries like RMG and tourism could contribute to sustained economic progress.