Sport 2000 International recently presented its figures for 2022. Despite all the current crises, the buying group can once again boast considerable growth and consider its strategy validated. It’s a strategy that encompasses retailers and retail formats. We spoke with Margit Gosau, CEO of Sport 2000 International GmbH and Managing Director of Sport 2000 GmbH (5 Country Organization), about the past year, Sport 2000’s “crisis-proof” categories, and why Finland and Sweden will no longer be part of the group.
2022 a successful year for Sport 2000 International
SGI: How was 2022 for Sport 2000 International?
Gosau: Excellent. Sport 2000 was able to generate retail gross sales/external sales of 6.5 billion euros in 2022, across all categories and in all segments. This represents a 15.5 percent increase over the previous year and a 36.5 percent increase over 2019.
Of this, a large proportion of external sales are attributable to the 5-country association (Germany, Benelux and Switzerland). The external sales of the 5-country association amount to 4.35 billion euros.
The total purchasing volume across all country organizations was 2.4 billion euros. In total, by the end of 2022, we had around 3,586 doors worldwide and around 2,300 retailers under the Sport 2000 umbrella, as well as 25 licensed country companies.
Which countries have performed particularly well?
All of them have performed well, Europe in particular.
Two countries set to leave Sport 2000 Group
You have just announced that Sweden and Finland are leaving the group. Why?
Yes, Sweden and Finland will leave at the end of the year. We parted ways by mutual agreement because we don’t share the same strategic direction. Our partners in Sweden and Finland belong to the SGN Group and operate under the brand name Team Sportia. But we are currently in the process of bringing the Sport 2000 brands – Sport 2000, but also Absolute Sports, Absolute Teamsport and Absolute Run – to the fore. And if, for example, we see quite clearly that the license partner does not want to come under the Sport 2000 brand umbrella in the long term, then a collaboration makes little sense from our point of view.
Our aim is not to fill the map but to ensure that the cooperation and the strategic alignment work in a qualitatively meaningful way.
So how many dealers will no longer be with Sport 2000 from the end of this year?
In Sweden, we have 300 doors and 228 dealers; in Finland 38 doors and dealers. As I said, we don’t collect mass. For us, quality is crucial.
If we look at last year’s results, they are mainly based on qualitative growth. This shows that our strategy – to focus on performance sports, to specialize, to position and to digitize – is working. We are strategically positioning ourselves in these three areas, and we want to push them.
Certain categories are proving independent of crises
Sales are up, but how have retailers’ margins evolved?
Looking at the purchase value, this increased by 24.7 percent in the total purchasing volume across all country companies.
For me, it is always important that the purchase value does not increase exorbitantly more than external sales because that would mean that we would have significant margin losses at our dealers. But that is not what is happening here. In our case, external sales are growing more than the purchase value, which shows that our strategy of focusing and positioning/specialization has, in principle, enabled us to generate higher average prices.
Another factor here is that in some product categories, e.g. Running, high prices were achievable during the Covid-19 crisis until 2022. The Running category really was able to sell for RRP prices.
Of course, that looks a little bit different today. In 2022 we saw the first aggressive price tendencies in Running and also a decline in growth because of the extremely high numbers in 2020/21.
So Running suffered a slight decline, how did the other categories perform?
We didn’t see these volatile developments in all categories. This is not the case at all with Outdoor, for example. We are seeing a very stable forward trend there. We have found that Outdoor is highly independent of any crises – whether that’s Covid-19 or inflation fears. People still care about continuing their outdoor experience.
At Teamsport, on the other hand, we naturally had an extreme drop in the Covid-19 year because many things could not take place. Now, however, we’re seeing a sort of a “hockey stick” effect and the category is growing substantially because of catch-up trends. Club sports are back, and clubs are equipping their teams again. So our Teamsport retailers are growing a lot.
Which category is the strongest in terms of sales?
For us, it’s the Outdoor category. But our sales statistics are not always congruent with the market at category level, because, of course, they only reflect our retailer structure, which is quite different from that of the competition.
For example, we have the highest proportion of specialists in our network. In Germany, we have roughly 400 multi-category dealers and about 600 specialists. Of these, over 170 are Outdoor specialists, which include the two largest pure online retailers in the outdoor sector; Bergfreunde and Bergzeit.
Sport 2000 International online sales and retailers are proving resilient
Can you say something about your online sales and how the Sport2000.de platform contributed to sales?
Online sales via our own platform still account for a very small percentage of our sales, which is mainly due to the fact that we only started in the middle of last year.
We launched our first version in 2020, and to date, we have tripled sales. By next year, they should double again. The goal, of course, is for us to grow massively online, but that’s ultimately not our decision alone; it’s also our retailers’ decision.
Have the crises of recent years had an impact on the number of retailers?
No. We all feared during the pandemic that there would be a big wave of insolvencies, but it didn’t come. And then at the beginning of last year we thought that there would be another wave of insolvencies due to inflation and the reluctance to buy. Fortunately, none of this has translated into insolvencies. And we don’t see any tendencies towards that either. On the contrary, the sports retail sector has emerged as a winner from the crises.
In times of crisis and when the consumer climate is down, sport seems to become more important because sport provides people with the psychological balance they need.
Supply chain difficulties “have calmed down again”
How much have you been affected by the supply chain issues?
The supply chain issues have affected all of us. In 2021, we had a massive product shortage with high demand due to the Covid-19 crisis, so retailers increased their orders for 2022 because no one knew if the products would even come. This also affected SS 2023 orders because no one knew exactly what would happen in 2022 either. Especially in the last quarter, Sport 2000 grew strongly, which was also due to these stocking issues.
And then the goods could actually be produced, which up to today has led to considerable overstocking in retail. However, retailers are reluctant to reduce this overstock by canceling or returning merchandise because it will be more expensive to replace the merchandise due to inflation. In other words, retailers are holding on to their overstock, hoping for an improved consumer climate, which is indeed on the horizon.
While we saw massive drops in sell-through rates among our retailers from June through August 2022, that turned around toward the end of the year. In December, our POS panel again showed a significant 2-digit increase in sell-through. And January and February 2023 have not shown any consumer slump tendencies either. Our retailers are above last year’s figures.
As of right now, I can say that the procurement markets have calmed down again.
