Effective Feb. 1, Gigasport, the banner of the Kastner & Öhler chain of department stores, and Sport 2000 Austria will form a purchasing partnership that is set to boost the buying group's turnover significantly. The new alliance adds 18 Gigasport doors to the existing 321 Sport 2000 stores in Austria, as well as three in Slovenia.
Altogether, the new combination will count 113 stores outside Austria, notably in the Czech Republic, Slovakia, Slovenia and Hungary. In Austria, the two market players together will combine a retail turnover of €450 million, with €342 million coming from the Sport 2000 banner and €108 million from Gigasport (all figures before VAT).
The deal transforms Gigasport into the largest member by far of Sport 2000 in the country.
Sport 2000 estimates that the group's share of the Austrian market will grow by 7 percentage points to 29 percent. While Gigasport intends to remain independent as a banner and in its identity toward the customers, the cooperation may go further than just the currently planned joint purchasing. For now, the two parties are not going into details about what further cooperation may look like, but it is clear that Gigasport will have access to the stock in Sport 2000's central warehouse and will use the buying group's invoicing and fulfillment. On the other hand, Gigasport will keep full autonomy and freedom on what and how much to buy. One starting point for a deeper cooperation could be joint product development.
While working on future synergies, the alliance emphasizes the advantages of the general structure of both companies: They see themselves and each other on the same high quality and service levels. The good news is that there are almost no overlaps geographically between the chain and the other members of Sport 2000. While Sport 2000's existing retailers have their stronghold in the touristic regions and ski resorts of the country, Gigasport is well established with its mega-stores in the cities and larger towns of Austria. As of now, the partners have identified no more than five overlaps as far as the locations are concerned.
Sport 2000 is not the only group of retailers in which Gigasport is a member. According to the management, Gigasport will keep its cooperation with the Italian Sport Alliance led by Sportler, the big Bolzano-based retailer, and will remain a member of the Euro Family, an informal cooperation of leading European specialty outdoor retailers. The management points out that the joint purchasing with the Austrian Sport 2000 concentrates on regular brands and suppliers, while the membership in the Euro Family focuses on purchasing the pan-European offer of outdoor-oriented exclusive brands (see today's issue of The Outdoor Industry Compass for the controversial relationship of Globetrotter with the Euro Family).
In 2012, Sport 2000 Austria managed to increase its turnover at retail prices, including Slovenia, Hungary, the Czech Republic and Slovakia from €377 million to €382.5 million. See here the latest key figures on the group as of Dec. 31, 2012: