Peter Wolf, who was recently appointed as the new chief executive of Karstadt Warenhaus, is serious about bringing the department store chain’s sports branch fast forward. Seven of 28 Karstadt Sports stores in Germany will be renovated by Spring 2008 as part of an investment of more than €100 million. The focus is on the sports superstores in big cities like Hamburg, Berlin, Munich, Bremen, Hannover, Karlsruhe and Dortmund.
Wolf clearly sees that something has to be done because the market share of Germany’s largest sporting goods retailer has decreased, according to company’s own estimates, from 13 to 8 percent since 2003. The group’s decrease was partially due to the sale of two specialized chains, Runners Point and Golf House, which were sold to private equity investors some two years ago along with a German camping equipment dealer, Fritz Berger. Last year Karstadt Sports had a turnover of around €470 million.
Wolf’s formula is simple: more women, more textiles and more turnover. Karstadt Sports intends to increase awareness of female shoppers, e.g. by offering a yoga collection designed by Ursula Karven, a well-known local actress. According to media reports, Wolf intends to raise the share of apparel in Karstadt Sports’ offer from 28 to 40 percent. However, the example of Sport Scheck, a subsidiary of Otto Group and the country’s largest specialized sporting goods chain, indicates that this may be a risky move. Sport Scheck walked massively into the apparel business, but then retrenched into hardware after learning that equipment was the segment that highlighted its technical image and expertise.
Karstadt is again in an acquisitive mode in the sporting goods sector. A few days before Karstadt outlined its new sports strategy, its sister company Primondo announced the acquisition of Planet Sports, a German retailer specialized in boardsports that sells through its catalog, via a website and through three stores in the Bavarian towns of Weilheim, Starnberg and Munich.. Primondo is the mail-order branch of Arcandor, formerly known as the Karstadt-Quelle group. Primondo is the new name for its catalog business, represented mainly by Neckermann, which is still for sale, and by Quelle.
The move is raising some eyebrows in the German sporting goods sector in view of the divestitures made in certain other niches of the sporting goods trade by Karstadt-Quelle two years ago, at the peak of a crisis that seems to be over now. Some observers see the Planet Sports acquisition in the context of the launch of the shopping platform myby.de, a joint venture of Arcandor and the German media giant Axel Springer. For the time being, myby.de is putting its focus on electronics, but observers see in the Planet Sports deal a way to help myby into the sports and lifestyle sector.
Meanwhile, Ralph Hartmann will replace Willi Darr next month as sales manager of Karstadt Sports, reporting to Wolf. Hartmann will join two other managers of Karstadt Sports – Marc Höfig in change of commercial operations and Frank Geisler in charge of purchasing. After other assignments, the 43-year-old Hartmann has worked for Alix Partners, a consultancy specialized in turnaround management that has accompanies Karstadt in its new strategic orientation.
