The tie-up between JD Sprinter and Sport Zone to form the second-largest Iberian sports retailer, which we reported about in the previous issue of SGI Europe, comes at a time of continued expansion for both retailers in the region.
JD Sprinter, which is owned at a majority by JD Sports Fashion, and Sport Zone, which belongs to the Sonae Group, announced earlier this month that they intended to form a retail group with 287 stores and an estimated joint turnover of more than €450 million in Iberia.
The Sonae Group, the Portuguese holding company for Sport Zone and other interests in real estate and retailing, reports that it raised the sales of its sports and fashion division by 30.9 per cent to €527 million last year.
This division comprises Sport Zone along with fashion retail banners and two sports brands, Berg Outdoor and Deeply. The two brands are apparently regarded as standalone entities and not to be integrated into the potential Iberian Sports Retail Group – unlike the franchise agreements for Sport Zone in France and India.
Sonae explained that the growth of its sports and fashion division was derived partly from the acquisition of two more entities, Losan in the last quarter of 2015, and Salsa in the second quarter of 2016. However, the performance of the existing business contributed to the expansion as well. Sonae said that Sport Zone maintained its positive performance in sales per square meter, despite the increase in the number of stores. Sport Zone said upon the announcement of the potential tie-up with JD Sprinter that it had 84 stores in Portugal and 45 in Spain (including 19 on the Canary Islands).
The sport and fashion division at Sonae reported an underlying Ebitda of €8 million, which was a significant improvement on the previous year, with all existing entities increasing their profitability. Sonae said the move towards the creation of the Iberian Sports Retail Group would add significant value to its sports and fashion business.
JD Sports opened two more stores in Spain in the last two weeks, in the shopping center of As Cancelas in Santiago de Compostela, and in the shopping center Meridiano in Tenerife. The British retailer in this way raised the number of its stores to 29 in Spain. It has another 12 stores in Portugal, to be folded into the potential Iberian Sports Group as well.
A paragraph in last week's issue of SGI Europe erroneously referred to a stake of 49.9 percent acquired by JD Sports Fashion in Sprinter, back in 2011. This was in fact the stake left over from the British retailer's acquisition of a small majority stake in Sprinter. At the time, the 49.9 percent was split equally between the Segarra and Bernad families.
It has yet to be confirmed if the split has changed since then, although a spokesperson confirmed that both Spanish families are still involved in JD Sprinter. The agreement for the potential Iberian Sports Retail Group stipulates that the combined group should be owned at 50 percent by JD, at 30 percent by Sonae and at 20 percent by the family shareholders of JD Sprinter.
