Sport Danmark, the company that owns the Danish loss-making Sportmaster chain of sporting goods stores, was sold on Dec. 23 by Nordic Capital to a company in Singapore, Sportmaster Operations Pte., created by the Russian Sportmaster Group in 2012 to oversee its development in China and to conduct acquisitions in Western Europe.
The price paid for the transaction has not been disclosed. The company in Singapore was also used by the leading Russian sporting goods retailer a few weeks earlier for the previously reported takeover of Go Sport Polska, which operates 34 sporting goods stores in Poland and was previously owned by the French Go Sport Group.
Also known locally as Sport-Master and operating a total of 89 stores, the Danish Sportmaster is the biggest sporting goods retailer in Denmark. Its sales of 1,148 million Danish kroner (€153.6m-$170.6m) in 2018 gave it a market share of 19 percent in the country, but they generated losses of more than DKK 120 million (€16.1m-$17.8m) for Sport Danmark’s parent company, Sporting Nordic Holding, which took over the chain in 2012. It has been unable to get the business to deliver a decent profit since then.
Nordic Capital took over Sport Nordic Holding in 2012, but never managed to get the business moving. Besides its Sport-Master stores, it runs seven sneaker shops under the name Rezet Sneaker Store, following the acquisition of the banner in 2015. Earlier last year, Nordic Capital had to inject DKK 35 million (€4.7m-$5.2m) into the company. At the same time, Nordea surrendered a debt of DKK 125 million (€16.7m-$18.6m). As previously reported, while refinancing the Danish chain, Nordic Capital placed it under the management of a new chief executive, Sofie Lindahl-Jessen (SGI Europe Vol. 30 N° 19+20 of June 4, 2019).
Evidently, the Russian Sportmaster group is looking for growth outside its national borders as it has already reached a share of more than 20 percent in the domestic market. With total revenues of more than $2 billion in the domestic market, including some revenues from wholesale distribution, it operates over 515 stores in more than 230 cities, predominantly in Russia and Ukraine. It also has some stores in Belarus and Kazakhstan, and it is reportedly entering Uzbekistan, another member of the former Soviet Bloc (see the next story in this issue). Its expansion into China, which began in 2014, has been rather challenging.
We could not determine whether the similarity in the names of the Russian and Danish retail companies was a factor in the takeover. The Russian Sportmaster was born in 1992, after the liberalization of the country’s economy, starting as a distributor for Kettler and other foreign sports brands.
The Danish Sportmaster was founded in 1979 by a group of 16 hardware store owners who decided to diversify into the sporting goods business through a network of independent sports stores. They adopted Sport-Master as their common banner in 1978, forming a cooperative buying group that was subsequently affiliated with Sport 2000 International.
In 2007, the retailers affiliated with Sport-Master and its main rival, Intersport Danmark, started negotiations to sell their stores to an Icelandic investment bank and to a London-based private equity fund, but the subsequent financial crisis prevented the finalization of the deal.
