Intersport Germany has acquired substantial stakes in the two main activities of Sabu, one of the three leading buying groups for shoe retailers in its country. It has bought 50 percent of its purchasing and marketing operations, called Sabu Schuh & Marketing GmbH, as well as 25 percent of Sabu’s bank for central settlements, RSB Retail+ Service Bank.
Intersport’s investment in Sabu’s bank seems to be particularly significant, especially in view of the current credit crunch. It places Intersport on a par with Ariston-Nord-West-Ring (ANWR), another big German buying groups for shoe retailers and sporting goods retailers that owns the German Sport 2000 as well as DZB, the German central settlements bank.
With roughly 950 retail members who operate about 1,200 stores and made some €800 million in 2008 at the retail level, Sabu had €268 million in revenues through centralized invoicing and fulfillment. Intersport Germany now represents more than €2.4 million of turnover a year at retail prices which were done by roughly 1,400 sporting goods stores. Sabu’s bank, RSB, has centralized invoicing at €1 billion projected for 2009.
Intersport is not making the acquisition because Sabu is performing badly - Sabu has a solvability ratio of no less than 72 percent – but to generate synergies. Intersport and Sabu have agreed on a partnership which seeks synergies in purchasing, back-office operations and marketing. On the purchasing side, it seems clear that Sabu will benefit from Intersport’s buying power with the sports brands just as the shoe retailers affiliated with ANWR are from Sport 2000. The other big German buying group for shoe retailers, Garant Schuh + Mode, is also active in the sports segment through its Fair Play International Sport offshoot.
Sabu is already relatively strong in sports-related footwear. According to Klaus Jost, president of the German Intersport group, shoe retailers in Germany make roughly 10 percent of their sales from sports shoes, but these products made up about €100 million out of Sabu’s retail turnover of €800 million in 2008..
Technically speaking, Intersport Germany is not buying shares in Sabu and its bank because this is very difficult under German law. The two buying groups are registered as “eG” or a cooperative under local law. Therefore, the buyer of the stake in Sabu is not Intersport Deutschland eG itself, but Intercontact, the advertising agency of the buying group. Intercontact, which is about to change its name, was already used as an investment vehicle to acquire the group’s second-largest member, Sport Voswinkel, as well as a minority stake in Intersport Poland.
Sabu which stands for “Salamander Bund,” is a buying group for independent shoe retailers that was founded in 1952. Salamander, a big integrated chain of shoe shops with its own brand line of shoes and its own manufacturing facilities in Hungary, was a shareholder of Sabu until 2001. It was subsequently taken over by Garant, but this buying group became insolvent because the acquisition had been too expensive. Egana Goldpfeil, which subsequently took over Salamander’s trade name and its international retail chain, went bankrupt as well. Salamander has just been sold to Ara Shoes, an important conglomerate of footwear brands (more on this acquisition in Shoe Intelligence).
Sabu has not been a part of Salamander for eight years, but its office is physically still door-to-door with Salamander, which is located in Kornwestheim outside Stuttgart. Sabu’s operations are scheduled to move from Kornwestheim to Intersport’s headquarters at Heilbronn, effective June or July 2009. Ralph Hanus, managing director of Sabu Schuh + Marketing, will move to Heilbronn and will continue to run his organization.
There was a rumor at the Expo Riva Schuh show on Lake Garda in Italy this past weekend that Intersport Germany or Intersport International Corp. may want to acquire Garant as well in order to gain access to its vast shoes and sports retailing operations in the Netherlands and other countries outside Germany. Garant has been looking for new owners even since its insolvency, which finished at the end of 2007, and it has been talking to strategic investors. Such an acquisition would establish an even better balance with ANWR, which has an international presence in the footwear sector as well.
Intersport Deutschland has in fact been considering a possible takeover of Garant as well as G-Lord, a smaller and younger buying group for shoe retailers in Germany. For the latter initiative, there was even a letter of intent. However, top executives of Intersport in Germany and at the international level sqid there had not been any discussions lately about their possible acquisition of Garant.