Intersport Germany, the largest single cooperative of sporting goods retailers licensed by Intersport International Corporation (IIC), has signed a letter of intent for the acquisition of a majority stake in Intersport Austria, forming an even stronger supra-national nucleus within the organization.
Together, Intersport Germany and Intersport Austria represent the interests of retailers that manage a total of nearly 1,900 sporting goods stores in six countries - Germany, Austria, Poland, Hungary, the Czech Republic and Slovakia – with a leading market position in most of them. With respective retail sales of about € 2.7 billion and €800 million after VAT in 2012, Intersport Germany and Intersport Austria together had about one-third of the global retail turnover of Intersport.
Both companies are among the founding members of Intersport International, and they share similar values. Together, they will have a stronger voice on the board of management of IIC, which is chaired by Klaus Jost, joint managing director of Intersport Germany.
Franz Julen, chief executive of IIC, described the planned takeover as a further step in the consolidation of his organization around strong partners with a multinational approach to the market. He said that this will make Intersport stronger in a “tough” and “increasingly competitive” environment where integrated sports retailers such as Décathlon, Sports Direct International and JD Sports Fashion are expanding out of their domestic markets.
At Intersport, this consolidation process began about ten years ago with the takeover of the Polish Intersport licensee by Intersport Germany, which subsequently failed in its bid to acquire the Swiss Intersport organization. More recently, the Greek Intersport licensee, Fourlis, acquired the Turkish licensee and the Finnish one, Kesko, acquired Intersport Russia.
In the case of Intersport Germany's planned investment in Intersport Austria, it seems that the Austrian organization, together with IIC, took the initiative of approaching the German one last January. According to Intersport officials, it did so for a variety of reasons. While Intersport Austria is still financially healthy, it wanted to secure the longterm viability of the organization and maintain high levels of service and profitability in the face of various challenges. The management of IIC has been supporting and accompanying the negotiations.
Commenting on the benefits of this move, Gabriele Fenninger, chief executive of Intersport Austria, mentioned operational synergies with the German Intersport in the development of common product ranges, marketing, logistics and information technology. She said that this would make the affiliated retailers more competitive in a “dynamic environment.”
Officials of Intersport declined to discuss the terms of the acquisition, which is scheduled to be finalized by the end of August, or its possible relation with rumors in the Austrian press that Intersport was preparing a bid for the takeover of Sport Eybl & Sports Experts.
Eybl is the largest single integrated sporting goods retail chain in Austria, with a national market share of around 25 percent. As reported in our issue of Feb. 1, it announced in January that it was going to dismiss 250 of its 2,200 employees and that it had asked Deloitte to help find a financial partner for the company, as its equity ratio has declined to only about 10 percent. It subsequently said that it would close four stores and that two other shutdowns would follow shortly, bringing the total door count down to 52 units (more on Eybl in the following article).
