Just over ten years after Trolls Bratas entrepreneur and X-Games star Jon Olsson conceived of the idea of entrepreneurship in the waves of Sogn og Fjordane, their bag child has gone big. On almost every street corner in the capital, you can see people strutting around with one of the Db’s backpacks, formerly known as the Douchebag.
Since its inception, Norwegian Backpacking Adventure has sold over a million products worldwide.
Ambitions are no less in the future.
– We expect continued growth at 35-40 percent annually. Now is the time to combine high growth with high profitability, says CEO Eric Pascal at Db.
But not everything went smoothly.
Izzy and his owner have come from the USA to work for Db in Oslo. (Photo: Alexander Nordahl)
Triple lines of credit
We turn back the clock two short years. The Corona crisis is not over yet, and global trade has been severely affected due to frequent production stoppages and high shipping costs. Db’s largest supplier in Vietnam has stopped production for four months. Container ships piled up and bottlenecks worsened.
The company faced a dilemma. Do not ship what has already been produced or serve customers ASAP. Customers are chosen first. Then came air freight, which was ten times as expensive as sea freight.
– From a financial standpoint, it may seem like we shouldn’t be doing this, but if you don’t deliver to stores, they don’t trust you anymore. I call it an investment, and now it’s paying off, financially too, says Pascal.
Recent accounts for 2022 show that Db Equipment, Db’s parent company, increased its income by more than 40 per cent to more than a quarter of a billion crowns. However, unexpected costs resulting from the collapse of the value chain contributed to a shortfall of NOK 13 million.
This is the first time the company has lost money.
– We are still a small company, so any increase in revenue velocity or unexpected costs will affect our liquidity. We had to strengthen the financial structure. We have established ourselves with a new international bank and have tripled lines of credit. We’ve rebalanced the relationship between B2B and B2C, and our investors have stepped in with more money, says CEO Pascal.
He will not describe the events of the past year as a crisis.
– The company was undercapitalized and underfunded. He says running a business without loan financing is like running without an arm.
This year, the company is on track to achieve sales of more than NOK 350 million.
Big bet in the USA
The company is now in a significant growth phase, according to the CEO. Although there are plenty of Db bags in Norway, most of the sales come from outside Scandinavia. It invests heavily abroad, and the United States is one of the main investment regions, where the company has already gained a foothold. The reception has been very good, according to founder Truls Brataas.
– It really exceeded my expectations. It’s a tough market and I honestly think it’s going to take us five years to get where we are now. Pasquel, who has a background from French grocery giant Carrefour and clothing manufacturer Lacoste, among others, adds that we’ve entered more than 180 stores.
Pascal, who is of French nationality, is one of 22 different nationalities out of a total of 65 Db employees. Diversity is very conscious, according to the founder.
– We understood from the start that you have to hire people globally to build a global brand, says Pratas.
It remains the largest shareholder, with about a quarter of the shares. Other major shareholders are investor Christian Stabil Eriksen and former alpine climber Axel Lund Svindal.
Today, Db products have reached almost every corner of the world. The bags have been sold to 55 different countries. If the company grows at least 35 percent next year, as is the target, it will achieve billions in sales within four to five years. To achieve this, it may be appropriate to obtain outside capital, according to the CEO.
– Looking at the growth profile, it is normal at some point. Outside shareholders, private equity, stock market listing, all options are possible eventually, but that’s not something we think about right now. Seizing growth opportunities and reaching $1 billion in sales may require additional financing and we will address this when the time is right. He says creating investors is not on the agenda now.(conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We’d like you to share our statuses using links that lead directly to our pages. Reproduction or other use of all or part of the Content may be made only with written permission or as permitted by law. For more terms see here.
“Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff.”
