Russia’s largest sporting goods retailer Sportmaster has declined Decathlon’s offer to purchase its BlueBox chain of stores, which has stood idle since the middle of 2022, an anonymous source in Sportmaster told the Russian newspaper Izvestia. “Firstly, our stores are located close to each other, which is disadvantageous. Secondly, the stores of the French company are not located in shopping centers, but next to them. In our opinion, people shop without leaving the shopping center; buyers rarely go beyond its borders and go to nearby points,” the source explained. In addition, Sportmaster calculated that the existing chain fully covers its needs in brick-and-mortar stores. The company runs 450 stores in 220 Russian cities. The source added that new outlets would not provide a positive economic effect, which has made the takeover rather senseless.
BlueBox stores in Russia often sit next to supermarkets of another French brand, Auchan. The source assumed there are chances it would be interested in the takeover. Decathlon decided to withdraw from Russia on June 16, 2022. In some regions, the company’s stores kept operating beyond that date selling product leftovers. It became known in January that the French company plans to sell its business in Russia. Local publication Russian Business Consulting found out that the company hoped to sell its Russian branch for 13 to 15 bn rubles (€163-187m). However, the publication reported that Decathlon needs permission from the Russian authorities for the deal, which the company has a low chance of getting unless it is ready to offer a 50 percent discount on its assets, citing market sources.
In early 2022, Decathlon ran 57 stores in Russia, operating on 135,000 square meters of commercial property, including 20 independent buildings housing its hypermarkets. In 2021, the company saw a 31 percent rise in net revenue of its Russian subsidiary Octoblue compared to the previous year to 28.57 bn rubles (€357m). Net profit nearly quadrupled to 1.48 bn rubles (€18.5m).
Marina Malakhatko, head of the retail department of the Russian real estate company CORE.XP, said that the attractiveness of Decathlon’s assets for investors would depend on the terms of the deal and whether the retailer’s supplies to Russia could resume once it is closed. She added that the assets might be of interest primarily to big retailers and real estate companies.
Decathlon may find it challenging to sell the entire business at once, said Ivan Fedyakov, general director of the Russian think tank Infoline. Like Ikea, which shut down its business in the country last year, Decathlon has too large-format facilities. It specialized in selling a vast volume of products under its own brands, luring consumers to not the best locations thanks to the brand’s strength, Fedyakov said.
