SGN Group of Finland has acquired the second half of the shares it didn't own in Sportringen, a Swedish buying group. The company's management is to be integrated with Team Sportia, another buying group that was already owned by SGN Group, to form a Swedish sports retail group with about 300 stores. With sales of 4.3 billion Swedish kronor (€431.9m-$507.3m) in 2016, the company estimates that the combination is the second-largest sports retailing group in Sweden after Stadium.
The full acquisition of Sportringen allows SGN Group to form SGN Sports, an entity that brings together Sportringen and Team Sportia. SGN Sports could take significant advantage of synergies in terms of partnerships with suppliers, and through cost savings. The two entities will continue to run their own retail concepts, but their head offices will be merged by the end of next year.
Team Sportia consists of 75 sports stores and 80 bicycles stores, while Sportringen groups together about 150 smaller stores. They form a diverse group, with only a minority of the stores trading as Sportringen. It operates mostly as a buying group, without obligation for stores to purchase any set assortment, which makes it most interesting for independent retailers focusing on local demand.
Claes Meldgaard, the chief executive of Team Sportia, will take up the same function at SGN Sports and he will do both until next spring. The leadership at Team Sportia will then be taken over by Lars Palmgren, the chief executive of Sportringen.
After its acquisition of a majority stake in Team Sportia in 2014, SGN Sportia bought the first half of Sportringen two years ago. The second half was now purchased from Sandro Arcari, Krister Jonsson and Hans Hedefur, who remain on board as directors of SGN Sports.
SGN Group remains active in the Finnish sports retail market, with about 50 affiliated stores. After the tie-up with Team Sportia three years ago, about half of the Finnish stores have switched to this Swedish concept, while the others continue with the Sportia concept. Comparable sales are down by about 4 percent this year for the group's stores in the tough Finnish sports market.
SGN Sports will include Team Sportia and Sportringen along with a new bicycle retailing concept to be launched by the group in 2018. The bicycle stores buying through Team Sportia trade as Bike Partner and Tvåhjulsmästarna, but the group said it would focus on the central concept to be unveiled next year, with the stated ambition to become the market leader in Sweden. It has yet to be decided if the concept will be adopted in Finland as well.
Team Sportia re-joined Sport 2000 several years ago, and the group said that this relationship would remain unchanged. Both Team Sportia and Sportringen have their own private labels, which will remain in place. Team Sportia also has three exclusive brands for cycling products, which could be used for the new bicycle retailing concept.
The plan comes after a relatively flat year for Team Sportia and Sportringen. After a tough start to the year, the second quarter generated stronger sales of footwear and apparel, but sales of bicycles were under pressure. The third quarter has been more encouraging, and the group has seen a strong uptick in online sales.
SGN Sport is the largest remaining buying group in the Swedish sports retail market, after Intersport Sverige was acquired by an investment fund in 2015. The market has seen growing competition between Stadium, Intersport Sverige and XXL, the Norwegian retailer, which had grown to 25 stores in Sweden at the end of the third quarter.
Separately, Team Sportia intends to implement an operating model that should simplify its relationship with suppliers and retailers.