Gresvig, the leading buying group in Norwegian sports retailing, has been buying up several of its largest retail members in the last months, as the opening of large stores focusing on cheap prices like those of XXL Sport is putting pressure on the business of smaller urban stores.
Gresvig runs the G-Sport banner, which has about 190 own and franchised stores around Norway, and Intersport Norge, with some 120 affiliated stores. But since last year, Gresvig itself has opened four huge stores under the G-Max banner, which are meant to compete directly with XXL, a fast-growing independent retail chain with 15 large-scale stores. The G-Max stores are mostly situated in the same towns as XXL, making it harder for some of the Intersport and G-Sport members in these towns to sustain a profitable business.
Gresvig has therefore been offering to take over about 30 member stores in the largest Norwegian towns, particularly where it is opening its own G-Max stores. Gresvig had long owned a dozen stores, but between the takeovers and the G-Max openings, the tally of stores owned by Gresvig has increased to about 60.
The largest takeover occurred last year, when Gresvig acquired a group of 12 stores in Bergen, previously owned by Atle and Rune Svendal. XXL has two stores in Bergen, and G-Max is planning to open there soon. Gresvig also bought half a dozen stores belonging to Egil Bro in Trondheim. Three months ago it went ahead with the acquisition of seven more stores in and near Tromsø, which it bought from Christina Bøchman. Other stores were bought in Ålesund, Stavanger and Oslo.
Launched last year, the GMax format has been applied to four stores so far in Ålesund, Stavanger, Fredrikstad and Kristiansand, with an average size of about 3,500 square meters. A fifth G-Max store is to open in the Storo shopping center near Oslo shortly.
As the competition intensifies, at least two prominent Norwegian outdoor and sports brands have decided to put an end to their central agreement with Gresvig – partly cutting themselves off from a retail group that represented 38 percent of the Norwegian sports market last year, judging from the latest figures by Sportsbransjen, the industry organization in Norway. Norrøna did so two years ago, and Helly Hansen followed suit this year. The retailer said such brands had been replaced with wider assortments from other suppliers, such as Haglöfs and Bergans, as well as some more private labels.
Some suppliers fear they are getting caught in the crossfire between Gresvig and XXL, which could damage their brands, and others complain about the high fees required by Gresvig for marketing and other purposes.
G-Sport and Intersport stores are striving to differentiate themselves from the larger formats with an offer based on service and convenience. They performed roughly in line with the Norwegian market for the first half of this year, with a sales decline in the first quarter but a sharp upturn in the second quarter. Gresvig's ownership of more stores also makes its purchasing more cost-efficient – potentially improving margins for the entire network.
Partly to deal with the market upheavals ahead, Gresvig is enlarging its management team. The group, which further comprises three fashion chains, is still headed by Rolf Gullestad. For the last years he has also been the managing director of Gresvig's sports division. However, the company has decided to split functions, so that a new head of sports formats will be appointed next month, to start around the beginning of next year. Each of the formats still has its own manager: Ola Bye for Intersport, Dag Johanson for G-Sport and Henning Eriksen for G-Max.
