Intersport Spain has set forth a strategic plan for the next three years, 2021-23, to bolster its brand and rejigger its inner workings.
The public has “lost confidence in Intersport,” said Oriol Tomas, chariman of the Spanish retail organization, in an interview with CMDsport. To regain it, the buying group has set an explicit objective to become “the preferred destination for consumers of performance sports.” Or, as its CEO Xavier Alomar has told Diffusion Sport, “changes seen in the market, in the behavior of consumers as well as of suppliers and brands, demand that we adapt to a new horizon.”
The plan rests on three pillars: (1) product selection, with a combination of attractive, high-quality and multi-category name brands and house brands (McKinley, Firefly and Energetics); (2) omnichannel points of sale renovated and standardized for profitability and sustainability; and (3) “one voice, one brand” communications, to unify the offering for the consumer and the market, and loyalty programs tailored to each store’s locality. House brands, incidentally, account for about 10 percent of Intersport’s business in Spain.
By the end of this year, 95 percent of Intersport’s points of sale will reflect the new corporate image, and all should be operating on the same computer system by the first half of 2022.
The plan’s second pillar breaks down into several parts. Intersport will be farming out some of its logistics (to a company called Ceva) and digitalization, overhauling its financial structure, and putting its headquarters, in the Catalonian city of Rubí, up for sale. The company will thus be needing less warehouse and showroom space. The sale will both bring in capital and cement certain pandemic-related changes to the company’s labor practices. There are no plans for now to lay off any of the headquarters’ staff, which stands at about 70.
At present Intersport operates more outlet stores in Spain than any other banner. According to Alomar, however, the current tally of 19 will be cut to 14 or 15. “We will be keeping only those that are truly profitable,” he told CMDsport, “adapting their selection and the inventory-return percentages of our partners to volumes that truly reflect the demand.” A new credit and risk insurance policy will seek to eliminate insolvencies by setting limits on retail partners.
The buying group federates 293 stores, including 155 operating under the Intersport banner. By the end of 2021, says Alomar, there will be nearly 200 under the banner. Speaking to Diffusion Sport, Alomar said: “Our format is based on stores of 400 to 500 square meters and a multi-category strategy in which each retailer prioritizes what it considers most suitable for its specific environment.”
The total sell-out for the Intersport stores amounted to €214 million in 2020, down 25 percent year-on-year. The figure was even worse for the revenues of the buying group, with a drop of 36 percent from €96 million in 2019 to €61 million in 2020. Alomar chalks this up to pandemic-inspired order cancellations from partners, the buying group and suppliers alike.
On the bright side, e-commerce was up. It accounted for 2 percent of sales (€5.7 million) in 2019 and 5 percent (€10.7 million) in 2020. The current year looks to be on rack to meet growth projections from 2019’s figures.
In sum, says Alomar, “our objective is to grow more in value than in volume, and it’s not clear that greater volume leads to greater value.” Tomas takes a more abstract view: “Our chief intention is to have a clear, profitable and replicable concept.”
With the third pillar, finally, Intersport will place an emphasis on verticalization, taking its cue less from other buying groups than from the already vertical retail chains operating or likely to arrive in Spain. An early step in this direction has been to hire two advisors, in finance and in digital.
Merging with Base?
While the focus remains on the new plan, Intersport is open to forming alliances with other groups. In fact, both Tomas and Alomar have told Diffusion Sport that there have been talks over the past year with Base-Detallsport. Relations between the two are “fluid and based on mutual trust. There exists a more transparent communication and, at the same time, an incentive to ponder an alliance and cooperation.”
Base recently stopped working with Sport 2000 International.
As for the retail landscape, Alomar tells Diffusion Sport that the group is seeing “no great differences in demand between the traditional channel and online except in women’s items, which do in fact show an increase of five percentage points in online as compared to the traditional channel.”
