Décathlon grows by 7.2% and expands fast, especially in China

Oxylane, the French group that owns Décathlon, registered total sales of €7 billion in 2012, corresponding to an increase of 7.2 percent compared with 2011. The growth rate was down from the 8.8 percent growth posted in the previous year, partly because of the poor state of the Spanish market (see the statistics in the News Briefs). On a comparable store basis, however, the rate of increase rose to 1.3 percent in 2012 from 1.1 percent in 2011. 

The company's international operations accounted for 56.5 percent of total sales in 2012, up from 55.4 percent in 2011. The share taken by the French market declined to 43.5 percent of global sales, in spite of six store openings in the country during the year, which brought the number of domestic stores to 256. Five more should be opened in France this year.

The stores in France posted a positive sales performance in 2012 with turnover up by 4.8 percent to €2.82 billion, representing a 2.7 percent increase on a comparable-store basis against 2011. The increase was mainly due to higher average prices, but it was largely in line with the evolution of the French sporting goods market (see the statistics in the News Briefs).

The group had 736 stores worldwide at the end of 2012, 57 more than a year earlier. The Décathlon banner alone lifted the total number of its stores by 57 to 653 on a net basis. The group's other banners, including Koodza and Decat', ended up with a lower store count than in the previous year.

As shown in the table on this page, the biggest expansion took place in Italy and China. At the end of 2012, the most important markets by the number of shops outside of France were Spain with 97 units (+5), Italy with 85 (+8) and China with 54 (+15). In all the markets where Oxylane is operational, the net number of outlets was up from the previous year with the exceptions of Sweden, the Czech Republic and Hungary, where it remained stable. The chain shrunk only in Portugal, going down temporarily by one store to 21, due to a fire.

Oxylane entered the market in Taiwan last June with a 4,500 square-meter store south of Taichung, and it expects to open a second door in that country by the end of 2013. As previously reported, the French retail group will enter the Bulgarian market this year with a store in Sofia, taking the total number of countries where it operates up to 20. The year 2012 marked the 20th anniversary of the group's presence in its second-largest market, Spain, where it opened its first store in 1992, near Barcelona. Its Spanish workforce comprises around 10,000 people.

Oxylane will continue to expand more rapidly outside France than in its domestic market, where it is the leader by far. In the next few years, the emphasis will be on the BRIC countries – Brazil, Russia, India and China – and on Turkey. As previously reported by us, Décathlon has struck a partnership in China with a large local real estate operator to help it move into lower-tier cities, with a plan to raise the number of stores in the country to 150 by 2015. That would be 50 more locations than the company had planned three years ago, and according to sources in China, there is even a longer-term project to reach 999 locations in China by 2020.

With the Chinese operation generating profits since 2007, the company has accelerated its expansion in China, making it the fastest-growing country in the last three years. Fifteen new stores were opened there in 2012 and between 20 and 30 more may be opened this year, with a majority of new shops located in tier-2 and tier-3 cities. Sources in China told us also that Oxylane may soon test out the smaller Decat' retail format in the country.

The group's profitability declined in the past year, according to members of the French press who attended an unusual press conference given in connection with the results. They also reported that 65 percent of the products sold in Décathlon stores are now private label.

The group continues to innovate. It registered 30 new patents last year, 13 of which concerned its brand of bicycles, B'Twin. One of the highlights was a quickly foldable bike, called Tilt, which came out at the end of 2012.