A new survey conduct in April by the Federation of the European Sporting Goods Industry (FESI) indicates that most sporting goods companies are now “on their way to recovery;” despite the difficulties they have been going through over the last 12 months. The picture is, however, quite diversified. The outdoor sector and some others have registered a tremendous increase in revenues, while the ski industry is still paying the price for the closure of ski lifts in many European countries. The new figures are featured in the third edition of the “FESI survey on Covid-19,” released on June 2.
The vast majority of respondents (75%) recorded a loss of turnover of up to 30 percent in 2020 as compared to 2019. For 12.5 percent of the respondents, the rate of the decline lied between 21 percent and 30 percent. Only 13 percent of the companies saw revenues increase in 2020, thanks to the expansion of individual and outdoor sports (cycling, running, hiking, etc).
On a more positive note nearly half of the companies envisage a smaller impact of less than 10 percent from the pandemic on their turnover in 2021, while 13 percent even forecast growth. Also, more than 80 percent of the respondents do not expect to go bankrupt in 2021, and more than half (56%) are confident that the economic activity will recover in 2021. For the remaining 44 percent, the economic recovery is more likely to occur in 2022 or 2023.
By distribution channel, revenues from physical stores were the most-impacted in 2020, as 62 percent of the respondents were forced to shut them down to comply with sanitary restrictions. By contrast, 25 percent of the respondents saw an increase in online sales of more than 60 percent. For another 44 percent, online sales grew by between 20 and 40 percent. Combining the two trends, almost 20 percent of the respondents said that online sales offset the decline in revenues from in-store sales by more than 60 percent. Unfortunately, 18 of the respondents, mostly small and medium-sized enterprises (SMEs), do not have an online store and they were not able to benefit from the boom in the digital channel.
In addition to a shift toward e-commerce, other consumption trends emerged during the pandemic. For example, consumers increasingly opted for repairing rather than purchasing new products. Leasing, renting and second-hand buying also registered increases.
By product segment, the demand for outdoor equipment jumped, driven by the restrictions on indoor sports. More than 55 percent of the respondents reported an increase in this segment. Nearly 44 percent of the respondents registered an increase in the demand for footwear, followed by a 37 percent increase for bikes. Opposite trends were recorded by ski companies, though, with 89 percent of them recording a loss of up to 50 percent due to the closure of ski lifts during the 2020-2021 winter sports season. For 11 percent of them, the loss exceeded 80 percent. Even in the countries where ski lifts remained open, 67 percent of the companies witnessed a strong decrease in the number of visitors, the report indicates. For 67 percent of the respondents, the winter sports season represents between 10 and 50 percent of their company’s total turnover. Although state aids limited the damage, more than 55 percent of the respondents in this segment said that these aids only covered less than 10 percent of the lost business.
Asked to comment on the role of the European Union in managing the crisis, 75 percent of the respondents expressed a negative view, with 37.5 percent saying that its response to Covid-19 was “not good at all” and another 37.5 judging it to have been “not good.” The recommendations made by the participants in the survey included: reopening stores, resuming sport activities in compliance with safety guidelines, ensuring more coordination and alignment between EU member states, improving the delivery of vaccines and the harmonization of vaccination certificates to make travel possible again, and accelerating the distribution of financial aids under the EU recovery plan.
To conclude, among the five most pressing challenges, the companies surveyed by FESI placed the supply chain disruption at the top. It was mentioned by 93 percent of the respondents, followed by the global shipping crisis (87%), delivery fulfilment (80%), travel restrictions (67%) and cash-flow management (60%).
The survey was conducted during the month of April 2021, covering the entire period of the Covid-19 outbreak until now. The report is based on responses from a critical mass of the European sporting goods companies, with 80 percent of them being brands and retailers, 12 percent manufacturers, and 8 percent suppliers to the industry. The respondents include large enterprises with more than 250 employees (38% of the respondents), SMEs with between one and 249 employees (50%), and national trade associations (12%).
FESI represents the interests of 85 percent of the European sporting goods companies (about 1,800 sporting goods vendors) through its national sporting goods industry federations and its directly affiliated member companies. Between 70 and 75 percent of FESI’s membership is made up of SMEs. The European sporting goods industry employs more than 700,000 people and has an annual turnover of around €81 billion.
