Ariston-Nord-West-Ring (ANWR) is the parent company of Sport 2000 Deutschland, which operates also in Switzerland, and a minority shareholder in Bico, the German cooperative of bike retailers. Like ANWR, Garant operates mainly in the shoe retail segment, but it also runs national cooperatives of sporting goods retailers, called Fair Play International Sports, in the Netherlands, Belgium, Germany and Switzerland. It is also set to guarantee centralized settlements for Twinner and another French cooperative, Pros du Sport.
Confirming earlier speculation, ANWR has announced an agreement to take over the entire business of the Garant group, forming the biggest retail cooperation in Europe involved in both footwear and sporting goods, with more than 6,000 affiliated retailers all over the continent. It will clearly have the leadership in footwear, with a 40 percent share of the market in Germany and 4,230 retailers running 7,184 shoe shops in various countries. There are also 1,579 sporting goods and bike retailers that are affiliated with the new group, running a total of about 2,000 sporting goods stores and 554 bike shops
In an initial stage, ANWR is acquiring 69.93 percent of the ordinary shares and 84.3 percent of the Class A shares of Garant by taking over Erste Amplificator, the company formed by Garant’s creditors to refinance Garant and take it out of its former insolvency. The price of the deal will be disclosed later on, when ANWR will launch a non-binding bid for the balance of the shares at the same price.
ANWR and Garant are now setting up a new common structure intended to improve processes, to generate synergies in operations between the two companies and to develop them all over Europe. The terms of their cooperation in the sporting goods sector have not yet been finalized, and it should only be implemented from 2011 on. Discussion on that will start at the end of this month, taking into account the structure of Sport 2000 International, but Günther Althaus, chairman of ANWR, said at a press conference in Frankfurt last Monday that the tie-up should help the combined group to exert a more important role in the European sporting goods market in the future.
While competing against each other, the two big German-based buying groups complement each other well geographically. Having lost many retail members in Germany and the confidence of several suppliers through its recent insolvency, Garant has become very international-oriented. It has a presence in 19 different European countries, with 70 percent of its centralized settlements of €741 million generated outside Germany last year. Instead, the bigger and financially stronger ANWR got 85 percent of its total business volume of 5,827 million last year in Germany, including the services of its own DZB bank and Aktivbank.
Accordingly, ANWR, which has developed excellent processes under Althaus’ management, will centralize management information systems, financial services, personnel and other operations for both companies, seeking to improve them further for the benefit of the retail members and their suppliers. On the other hand, Garant’s office in Düsseldorf will act as the central platform for the group’s development in foreign countries. The enlarged ANWR group will make new attempts to take orders from suppliers on behalf of retailers from different countries – something that Garant had trouble negotiating. This should be easier in the area of sporting goods than in the footwear segment.
The acquisition is being described by ANWR as a response to the growing concentration of the industry, which has taken place so far mainly in the sports sector, and facing up to major players such as Clarks, ECCO and Geox. This is true also at the national level in markets such as France or the U.K.
ANWR has been considering a takeover of Garant since its insolvency, showing interest especially for its international operations. Intersport had also expressed interest in Garant, but then decided to work together with Sabu, the other major German cooperative of shoe retailers. The discussions between ANWR and Garant have become more intense over the past few months and the final decision came after the release of Garant’s relatively good financial results for 2009 (more in Shoe Intelligence).
