The Singapore-based parent company of the Sportmaster Group, whose eponymous retail chain is the largest sporting goods retailer in Russia, has decided to divest the retail chains that it had acquired in Poland and Denmark in the last years as part of a wider geographic diversification. It already sold its 30 Sportmaster stores in Ukraine last autumn.
“Taking into consideration current events in Europe, Sportmaster Operations (Singapore) has decided to put its assets in Denmark and Poland for sale,” said a top manager of the group, without elaborating on the reasons for the move. As reported by the Danish press, the group’s strong presence in Russia has made it the target of some criticism following the Russian invasion of Ukraine, which began on Feb. 24.
About one year ago, the Ukrainian government imposed economic sanctions on Sportmaster’s operations in Ukraine and urged the U.S. and the European Union to do the same, claiming that the group was still doing business in Crimea, a former Ukrainian territory annexed by Russia in 2014. Without publicly confirming the allegations, Sportmaster decided, in the end, to sell its stores in Ukraine, which are now trading under the Atletics banner. In addition to its own stores, Sportmaster had franchising arrangements with about 150 other stores in the country.
Denying reports that the Ukrainian business has been nationalized, Sportmaster says that its new owners are ultimately the citizens of Singapore via its new investors: Pulau Arts Ltd. of Hong Kong and Felix Ltd. of Singapore.
Sportmaster already has an estimated share of about 20 percent in the Russian sporting goods market, where it also acts as the exclusive importer of several foreign brands.It also has some stores in the former Soviet republics of Belarus, Kazakhstan and Uzbekistan.
After lower-than-expected results from the stores it had established in Northern China, Sportmaster began to look for acquisition opportunities in Western Europe a few years ago. It bought the 34 sporting goods stores operated by the French Go Sport Group in Poland at the end of 2010. A few weeks later, it took over Sport Danmark and its 89 stores, trading under the Sportmaster banner in Denmark, from the Nordic Capital private equity fund.
The Polish stores are still operating under the Go Sport banner under new management, but their number has since been reduced to 27 units. Martes Sport, the largest sporting goods retailer in Poland, took over some of the shops, and an official of the company said it is not interested in the rest of the business.
After continued losses in the previous years, the Russian group placed the Danish Sportmaster operation under new management at the beginning of 2020. It has been supporting it financially and in terms of infrastructure, sourcing and IT. Last summer, it told us that it wanted to use the Danish company for its expansion into the Nordic countries, probably following the business model pursued by another Danish major sporting goods retailer, Sport24, capitalizing on its strong online retail platform.
“The advantages of being part of an international group have diminished and become a potential obstacle,” said Andreas Holm, the new CEO of the Danish Sportmaster group, in a Linkedin post. “The tragic international developments of the last few weeks have set a new agenda for ownership relations. This has made me, the management team and many others focus on other things than implementing the established and strong growth and expansion strategy,” he added.
