Babolat has set up a new subsidiary in Guangzhou and is making other investments to push its presence in the big market for badminton racquets in China and the rest of Asia, which is dominated by Yonex.
Babolat is still the number one brand in the declining Japanese tennis market, and Japan is the second-largest market for the French brand after the U.S. Babolat plans to leave things there as they are until at least the year 2020, in spite of recent development on the corporate front.
The brand has had a long-standing relationship with a local firm, Dunlop Sports, in which Sumitomo Rubber Industries acquired all the shares last year. At the end of 2016, Sumitomo, which is also the supplier of Babolat's tennis balls, had already taken over Dunlop's brand rights in the U.K. and other parts of the world from Sports Direct International, creating a potential conflict of interests.
Anyhow, Babolat wants to grow its position in the Japanese badminton market, which is still very small. It has had for many years a small team of directly employed people at Sumitomo Rubber in charge of its brand, headed up by Guilhem Rogez.
The game of badminton is much bigger than the game of tennis in China, Japan and the rest of Asia. To back up its Asian badminton development program, Li Na, the Chinese tennis champion sponsored by Babolat who won the women's final of the Roland-Garros tournament in Paris in 2011, will be the company's international ambassador in the badminton sector.
Li Na ended her professional career in tennis four years ago due to physical problems, but like many Chinese people, she played badminton when she was younger. Another ambassador for the brand is Hongyan Pi, a former French badminton champion born in China.
Babolat will continue to sell its tennis racquets in China through a distributor, but next year it will set up a “performance lab” for badminton at its new Asian “basecamp” in Guangzhou, where it employs a dozen people under the management of a Frenchman, Sebastien Bodennec, who comes from a different sector.
In a similar vein, Babolat is setting up its “performance lab” for padel tennis (paddle tennis in the U.S. and Canada) in Madrid, with dedicated R&D and testing facilities like its new “performance lab” for tennis at Sophia Antipolis, in the south of France. All the company's R&D operations were previously housed at its global headquarters in Lyon, but the head office moved to another part of the city last year. Babolat also created a new American “basecamp” for the brand in Miami.
Babolat wants to make its mark in badminton as well as in padel tennis, which is big in Spain and many Spanish-speaking countries in Latin America, and padel tennis is developing strongly in France, Italy and other European markets. Babolat is already the number one brand of badminton racquets in France, but it still is in its infancy in padel tennis. In the financial year ended last June, Babolat's sales were only €9 million in badminton and €1.5 million in padel tennis, compared with €103 million for tennis hardware and €22 million for tennis shoes and apparel.
Badminton, padel tennis and the new Asian “basecamp” are part of an ongoing effort by the company to diversify its business from the relatively stagnant or slightly declining market for tennis racquets, where it claims the leadership in Europe, the U.S. and Japan, with a global market share in value of around 30 percent. It also claims the leadership in tennis strings.
Tennis racquets, strings and stringing machines are still Babolat's core business, with a share of 70 percent in the total turnover. Badminton and padel tennis are regarded as “new territories” like balls, accessories, apparel, footwear and other products such as its five-year-old Babolat Play range of connected racquets and bracelets. This system is being constantly updated, but it has remained marginal in terms of revenues.
In line with the tennis market, Babolat's total revenues have been relatively stable in recent years. They were flat at €141 million in the financial years ended in June 2014 and June 2015. They enjoyed a small forward spurt to €145 million in the subsequent year, but they plunged to €136 million in the year ended in June 2017, due to currency effects including those induced by the Brexit vote in the U.K. They are expected to go up slightly to €138 million in the financial year ending on June 30, with a small progress in tennis that the company attributes to strong sales for the Decima and the latest version of its Pure Drive racquet, launched last December.
The Decima is named after the tenth victory of the star player sponsored by Babolat, Rafael Nadal, at Roland-Garros one year ago. A few days ago, during the current edition of the Paris tournament, Babolat celebrated the 20th anniversary of the brand's first victory at Roland-Garros as the sponsor of Carlos Moya, who became Nadal's coach early last year.
In the last few months, the 48-year-old chief executive of the family-controlled company, Eric Babolat reorganized the middle management, following the company's decision to part ways last September with Giovanni Pietra, who had been the company's global sales adn marketing director since the year 2000. Last summer he appointed a new deputy general manager, Eric Lambert.
Lambert, who previously worked for Renault and other French companies, was placed in charge of sales, operations and quality control. He is working together with Xavier Gibert, another deputy general manager who has been involved in brand marketing and innovation since 1986. Since last November, Babolat also has a new global marketing director for tennis, Antoine Ballon, a former global marketing director of Wilson who previously worked most recently for Cervélo Cycles and Tennis Warehouse.
A local retailer is operating a pop-up store for Babolat in Paris for the current Roland-Garros tournament, which is not accessible to everybody. The company has no specific plans in the area of direct-to-consumer sales, but it is testing a web store in the U.S. for the members of tennis academies.
