Budget Sport, the new low-cost self-service format of Intersport, has not yet found an application in any other country until now, but Intersport Finland, which launched it successfully in the Spring of 2006, is pushing it strongly. Each sprawling over 3,000 square meters, two more will open in the Spring of 2008, and company officials expect that they will lead the format to generate a profit.
Intersport Finland has just signed the contract for a new Budget Sport store that will open at Friisila, in the Espoo district 15 kilometers West of Helsinki, close to several shopping centers. It will start up at about the same time as another one already planned at Raisio, in the Turku area. One more will follow in the Spring of 2009 further North, in Oulu.
Kesko, the large retail conglomerate that owns Intersport Finland, is aiming to open between 6 and 8 Budget Sport outlets throughout the country, all company-owned. It is quite satisfied about the performance of the first outlet in Vantaa, close to Helsinki’s airport, which became the strongest selling store in the country in its first year of operation. A second Budget Sport was opened in Lempääla last Spring.
The Budget Sport program is being led by Juha Norminen, a former retail director of Intersport Finland who took over the top job within Kesko’s sporting goods department last May from Jussi Mikkola. Nurminen has been with Kesko Sport in marketing and sales since 1988, and he was most recently in charge of sales and purchasing. Mikkola, who ran this important division of Kesko for many years, switched over to the management of Kesko’s home electronics department.
The sports division was singled out as one of the three segments of Kesko’s business that showed the biggest improvements in profitability in the nine months ended last Sept. 30. Not including the sporting goods departments of Anttila and Citymarket, two other generalist retail operations of Kesko, Intersport Finland booked an increase in revenues of 6.4 percent to €105.9 million during the 9-month period, including a 5.3 percent rise in the 3rd quarter.
Besides the new Budget Sport banner, Intersport Finland’s network of company-owned and franchised stores currently comprises a total of 57 doors trading under the Intersport and 41 trading as Kesport. The Intersport stores had retail sales after VAT of €181.5 million in the first nine months of this year, up by 5.7 percent. Kesport stores raised their sales by 8.4 percent to €21.8 million, with a jump of 17.3 percent in the 3rd quarter.
Kesko has not yet decided whether it wants to exercise an option to introduce the Intersport banner in the Baltic countries, where the sporting goods retail sector is dominated by Sportland International, an Estonian company in which a Swedish group acquired a minority stake recently to help support its strong development. Kesko has other investments in the region.
For the 3rd quarter of 2007, the Finnish group has reported a 10.2 percent increase in overall net revenues to €2,421 million, with growth of 6.2 percent in Finland and 24.5 percent abroad. Its pre-tax profit went up to €98.3 million from €84.4 million in the same period a year ago.
