Kesko Oy, which is already the leading player in the Finnish sporting goods market, wants to double the sales of its Intersport stores in Russia to €50 million by 2015, according to the company's annual report. The company's food and home improvement retail operations in Russia are expected to raise their sales to €500 million and €800 million, respectively, two years later.
Currently, the Finnish company operates 29 Intersport stores in shopping centers located in the St. Petersburg and Moscow areas, down from 36 prior to Kesko's investment in Russia. They generated sales of €28 million in 2012. Kesko took over an 80 percent stake in the Russian operation in June 2011 and achieved full ownership in April 2012, for a total purchase price of €21.8 million.
In Finland, where the group claims a market share of 35 percent, Kesko has 62 Intersport stores, 32 smaller Kesport stores and nine Budget Sport stores, plus an online Budget Sport shop. Six new Intersport stores and two Budget Sport units were opened in 2012.
In the past year, the Kesport stores booked a slight sales decline to €22 million, but sales rose at the Finnish Intersport stores to €216 million from €193 million in the prior year. Budget Sport's sales increased to €38 million from €32 million.
Intersport Finland and Budget Sport achieved positive profit performances in the past year. They contributed to an operating profit of €19.8 million for the home and specialty goods trade segment of the group on sales of €1.6 billion.
Including its numerous other retail operations, the total revenues of the Kesko group rose by 2.4 percent in 2012 to €9,686 million, but sales outside Finland improved by 9.0 percent. The group's profitability declined, partly due to the expenses incurred in the reorganization of its Russian business and the opening of several department stores. Operating earnings went down by €63.9 million to €217 million and pre-tax earnings fell by €67.0 million to €215 million.