Swedish underwear company Bjorn Borg is to shutter most of its shops in the Netherlands, blaming long-term weakness in the Dutch market and under-performing stores.

The retail network, which consists of 24 Björn Borg stores, will be "substantially reduced," the company said.

But the wholesale operations of its Dutch distributor, which generates a large part of the brand's sales in the country, are managed by a separate company and are not included in the retail reconstruction.

"The wholesale operations are profitable, and the brand maintains a strong position in the country, even if the Dutch economy is struggling with major problems," says Arthur Engel, CEO of Björn Borg.

The move is expected to reduce annual consolidated sales by 3-4%. Lower purchases from the Dutch distributor for its retail network have already impacted the group's sales, but it is also thought that some sales from closed stores will shift to other channels, including e-commerce.

The reconstruction is due to be completed by the end of 2013.

The Björn Borg Group operates 17 of its 57 stores, and last year generated net sales of SEK551m.

Earlier this month it also revealed plans to discontinue its operations in China.