Group SBF of Brazil, the largest sporting goods retailer in Latin America, has set ambitious plans to add 140 new stores with a gross sales area of 85,000 square meters between the beginning of 2010 and the end of 2012. This will nearly double the size of the group over the three-year period while the country gets ready to host the Fifa World Cup in 2014 and the Olympic Games in 2016.
The company, which is based in São Paulo, will celebrate its 30th anniversary next year. According to a recent presentation by the company, its total store area doubled between 2006 and 2009, growing to 106,000 m², and it is set to rise to 129,000 m² by the end of this year.
The group had 158 stores in operation as of last June 30, spread all over Brazil, and the total number of doors is set to increase to 187 by the end of this year. They will employ a total of 6,100 people. The total store count will include 135 units trading under the Centauro multi-sport banner, 40 By Tennis athletic footwear stores and 12 Nike concept stores.
A recent survey showed that, as a brand, Centauro has top-of-mind recognition in Brazil by 4 percent of the population, coming in third place after Nike’s 19 percent share and Adidas’ 14 percent share, and its popularity has been rising over the years.
We would have featured Group SBF on our annual international retail chart if we had received its figures in time. We now have them and they show that it reached sales of 1,056 million reais (€447.6m-$613.2m) in 2009.
Because of the economic crisis, the growth of the group’s turnover slowed down to 22 percent in 2009, but it is now expected to rise by a strong rate of 41 percent this year, reaching a record level of R$1,485 million (€629.5m-$862.4m). The growth in same-store sales should reach a peak of 12 percent in 2010, overtaking a previous peak of 11.1 percent recorded in 2007, followed by increases of 6.8 percent in 2008 and 4.9 percent in 2009.
The group’s turnover has been growing at a compound annual rate of 29 percent since 2005, while its operating profit before amortization (Ebitda) has risen at an average compound annual rate of 32 percent to a level projected at R$175 million (€74.2m-$101.6m) for this year. The average amount spent by its customers has been increasing, too, going up to R$145 (€61.50-$84.20) per transaction.
According to Euromonitor, Centauro improved its share of the Brazilian sporting goods retail market to 18.1 percent last year from 14.6 percent in 2008, remaining way ahead of any other retailer. The second spot was taken last year by Décathlon with an estimated share of only 1.8 percent, and the French behemoth, which operated nine stores in the country at the end of 2009, is said to be planning to double its presence in this fast-growing emerging market over the next few years.
Focusing on shopping malls with stores of different sizes, Centauro lately represented 88 percent of Group SBF’s total sales. By Tennis took up a share of 10 percent and the Nike stores most of the balance.
Evidently, Group SBF can easily finance its heavy investments because of its high underlying profitability. Operating earnings before amortization and depreciation (Ebitda) are budgeted to grow to 15.2 percent of sales this year, up from a margin of 10.2 percent in 2009, but down from a record margin of 16.2 percent reached in 2008.
