According to preliminary data from the French sporting goods retailers’ association, FPS, French specialty sporting goods retailers raised their sales by 1 percent on a same-store basis in 2009. Against this backdrop, Groupe Go Sport lost some market share, suffering comparable store declines of 3.7 percent for its French Go Sport stores and 9.0 percent for Courir, but it turned in operating profit for the first time since 2003.
This subsidiary of Rallye reported last week an operating profit of €2.9 million, compared with a loss of €8.9 million in the past year, thanks to numerous factors. Operating earnings before amortization and depreciation (Ebitda) nearly doubled to €20.8 million from €11.2 million. However, the company still registered a consolidated net loss of €1.4 million, down from €15.9 million, partly because a shortening of payment delays ordered by the French government caused its net debt to jump to €47.1 million from €21.0 million in the course of the year.
The gross margin improved to 39.9 percent from 39.2 percent as the proportion of private label items sold in its stores has continued to increase. At Go Sport France, it grew to 35 percent of revenues, up from 31 percent at the end of 2008. Nevertheless, the group continued to work closely with major brands while implementing exclusive agreements with Ellesse and Pacific Motion. The Airwalk brand will follow this year.
Personnel costs were reduced by €10 million and other charges by €6.7 million. Further savings are expected through the new joint purchasing organization set up in Switzerland together with Sport 2000 France. Company officials would not comment on its possible impact on the results, noting that it has only recently started negotiations about the autumn/winter 2010/11 collections with 56 suppliers that have been identified for close collaboration as an alternative to Décathlon in the market.
As previously reported, the group’s total revenues declined by 4.4 percent on a comparable basis last year, down to €693.8 million before VAT. The Courir chain fared worse, but its sales began to pick up in the fourth quarter following a change of management and strategy.
Further progress is expected this year with the establishment of separate distribution centers for the two banners of the group and the launch of a new discount banner, called Sport Shoes Department, starting with a pilot unit opening in April at St-Geneviève-des-Bois, near Paris. If the test is positive, the new outlet format will be rolled out all over France to take care of the group’s close-outs.
About 30 present Courir stores should be converted to the new banner. Another 28 will likely be closed, leaving only 150 units based on a new concept where clothing has a larger place than before. Go Sport, which now has 127 stores in France, is also boosting its apparel offerings, which have been selling best.
The management wants to see 50 Go Sport stores redesigned by the end of this year according to a new format, where specific areas are dedicated to women’s sports, football, running and swimming, in collaboration with major brands.
The group has signed new master franchising contracts for Go Sport in Morocco, Belgium and Greece. The number of franchised stores grew by 10 to 50 in the past year. A dedicated warehouse will be set up in Dubai’s free zone next June.
