On March 19, the general assembly of Intersport Deutschland approved with a vote of more than 80 percent an initial plan to go into multi-channel retailing, including online sales, probably starting with the spring of 2013.
The new evisaged e-commerce platform is rather unique due to the fact that Intersport Deutschland is a cooperative of independent retailers who operate about1,550 shops in the country. Intersport organizations in other countries may not necessarily replicate the same business model.
Even though no details have been revealed to the press at this point, we hear that the affiliated retailers will be integrated in the concept in the sense that the customer will click on his or her preferred retailer. The fulfillment of a purchase may vary according to the wish of the customer.
That means that the buyer will have the choice between picking up the item at the dealer's store or buying directly online at Intersport or, to be more precise, at a company that is yet to be founded. In the latter case, the preferred retailer would get a commission worth 3-5 percent of the retail price, and the local dealer would be in charge of handling returns if the customer drops by the store that he clicked online.
Intersport wants to cover the whole range of shopping opportunities available currently, such as brick-and-mortar stores, internet, printed catalogs and smartphones. The master plan is to strengthen the red and blue brand as well as the awareness of the customer for the local retailer. Furthermore, one main reason to go online is to establish a presence there before active online retailers such as Amazon and Zalando win more and more market share.
On the other hand, Intersport doesn't want to slash prices, which could mean fierce competition between the headquarters and affiliated retailers. We hear that this is exactly what the group does not want. Therefore, it is not expected that the group's mail-order business will become huge – in the double rather than the triple digits of millions of euros.
The general assembly of Intersport Deutschland also approved the results for the financial year 2010-11, which have not been publicized. It is said, however, that the group booked a higher profit on strong growth in its consolidated turnover to more than €1 billion. Consolidated means that this figure does not count the total sales of subsidiaries or investments such as Intersport Systempartner; Intercontact, which technically owns the chain Intersport Voswinkel; and Intersport Polska, the Polish partner in which the German organization holds a minority stake. It should be emphasized that the good results were partially due to the fact that the company's financial year ends Sept. 30, so the outgoing bad winter is not in the books. As a reward, the assembly approved an unspecified bonus that the affiliated partners will get paid from the profits.
Meanwhile, Intersport continues a legal fight against Karstadt that began in 2007 when the department store chain claimed to be the market leader in the German sporting goods sector. Intersport went to court to make clear that it is in the leading position. Intersport won the case before two Munich courts, but now the Bundesgerichtshof, the German supreme court, has ruled that the case must be sent back to Munich for review.
The whole case is very subtle and mainly about proper wording. The question is whether a substantial portion of consumers may be cheated by such statements. What is more, the general quarrel is about the point whether Intersport as a group of retailers should be seen as one entity. The case might become even trickier if Karstadt were forced to reveal its current turnover in sporting goods. After Karstadt's bankruptcy, observers even bet that Intersport's largest member, SportScheck, with sales of €408 million (as reported in the last issue) might be bigger than the department store chain.
