The Signa Retail Group is boosting its position as the largest integrated sports retailer in Germany and one of the biggest ones in Europe with the acquisition of SportScheck, a chain with a strong omni-channel presence in the country. No precise numbers are available about the group’s total annual sales of sporting goods, but we estimate that they will be just under €1 billion in Germany and close to €1.2 billion in Europe.

SportScheck, whose sales declined last year by 2.3 percent to €280 million, will be managed together with the Karstadt Sports chain by the Galeria Karstadt Kaufhof department store group, which recently became fully the property of the Austrian-based Signa holding company following a merger of the former Karstadt and Kaufhof department store chains.

Galeria Karstadt Kaufhof and the Hamburg-based Otto Group, which has owned SportScheck since 1991, confirmed the takeover agreement on Wednesday, without mentioning the purchase price and noting that it still has to be endorsed by the German Cartel Office and other regulatory authorities.

The emerging German retail group will be managed separately from the more international Signa Sports United, which recently welcomed new investors, particularly in terms of purchases. Galeria Karstadt Kaufhof is handling purchases for the 32 Karstadt Sports stores as well as the sporting goods departments of the Karstadt and Kaufhof department stores.

Still controlled by Signa, Signa Sports United groups many pure sports e-tailers such as Internetstores and Tennis Point, which had sales of €420 million last year, making it the largest player of the kind in Europe in only three years’ time. It recently made new acquisitions in Germany as well as France.

Rumors started circulating in September about Otto’s discussions with several potential investors in SportScheck, which has been losing money since the implementation of a new SAP system in 2014, despite major investments in the modernization of its stores, digitalization and the engagement of consumers. Otto justified the sale of the chain with the fact that it still lacks the strength and scale to fight against discounters and online retailers.

SportScheck, which closed two of its stores in the last couple of years, still enjoys a lot of visibility and recognition throughout Germany. Stephan Fanderl, the authoritarian chief executive of Galeria Karstadt Kaufhof, proudly said that the acquisition is bringing with it some 10 million visitors annually at its 17 remaining downtown stores, 2.4 million customers of its web shop and 85,000 participants in marathons, fitness sessions and other events organized by SportScheck.

Karstadt Sports will likely make use of SportScheck’s strong e-commerce platform, but it’s not clear how the two companies will pool their purchasing operations. Karstadt Sports recently pulled out of the Intersport buying group, while SportScheck is still one of its strongest retail members. Reportedly, Tennis Point continues to work with Intersport, however.

Otto, which is a big online retailer and the operator of many shopping malls, will continue to be involved in the sporting goods sectors with two private labels, Otto and About You.

Fanderl, who was able to improve Karstadt’s results much more than his predecessors, will no doubt apply his rigorous methods to bring SportScheck back to profitability.

Fanderl has already stated that Galeria Karstadt Kaufhof aims to focus more on the sporting goods segment in the future, as it presents a strong potential for growth.

He has decided to reopen five of Kaufhof’s former Sportarena stores, which had been temporarily used by Kaufhof’s former owner, the Hudson’s Bay Company, to host off-price Saks-Off-5th stores. They have been renamed Karstadt Sports.

They were all reopened simultaneously on Sept. 28 – and are reportedly performing well. In the first couple of weeks, more than 150,000 people visited the new Karstadt Sports store in Bonn, which has been expanded, covering a total of 4,000 square meters on three floors.