Groupe Go Sport presented results last week that showed some improvement, largely thanks to strong sales in Poland and steady revenues from Courir, its chain of athletic footwear stores. To help lower its operating costs, 20 stores under the group’s three different banners were closed in the course of last year.
As a result, operating losses for the 2007 financial year dropped to €3.4 million from €11.9 million the previous year. The group’s net income came to €12.9 million, showing a turnaround from a €12.2 million loss sustained in 2006. The major factor here was a capital gain of €23.1 million on the sale of six stores.
Gross margins were up by 0.5 percentage points to 38.8 percent of turnover, thanks in part to the development of the group’s private label business, which represented 15 percent of sales, up from 12 percent the year before. Earnings before amortization and depreciation (EBITDA) were €15.9 million for the full year as compared to €9.9 million in the year-ago period.
Of the 20 store closures, three were made under the Go Sport banner, 15 under Courir and two under Moviesport. Although six Go Sport stores and one Courir were opened in France over the past year, the group will now freeze expansion on the domestic market and prioritize the remodeling of many of the outlets. A plan to open a store on Paris’ prestigious Champs Elysées avenue has been dropped.
Because of the store closures, consolidated revenues hardly budged, inching up 0.2 percent to €773.1 million. Slow sales in the Go Sport stores were attributed to unseasonal weather, workers’ strikes in the Parisian stores, a poor retail climate in December and a drop in the price levels of middle-range products. On a same-store basis, sales at Go Sport declined by 3.0 percent in France and by 5.6 percent in Belgium, while they shot up by 25.8 percent in Poland.
The Courir and Moviesport chains made up 20 percent of group revenues. The turnover of the athletic footwear chain rose by 3.0 percent in the full year, but on a comparable basis it increased by 5.5 percent.
François Neukirch, chief executive at Go Sport since last year, named some of the major strategies for 2008 that would help the group to turn the ship around. It wants to reduce the number of suppliers by 40 percent, and drop 10 percent of its SKUs. It will continue to push sales from the private label – whose revenues grew by 17 percent in 2007 – and capitalize on exclusive models from new collections, which represented 60 percent of Courir’s sales. On the other hand, the group will drop fishing tackle and horse riding from most of the Go Sport stores, as the group has suffered fierce competition from Décathlon and specialist retailers in these segments.
A new focus will be put instead on team sports, racquet sports, footwear and bicycles, which have generally sold well. Projecting the image of a sports specialist for consumers in urban areas, Go Sport wants to differentiate itself from the discount and outdoor image of Décathlon, whose stores are largely located outside the cities, through a wider variety of branded products.
Growing interest is coming from Middle Eastern markets as one new Go Sport franchise was started in Kowait and two in Saudi Arabia. Another two Courir franchises were set up in Saudi Arabia.
At the close of 2007, the group had a total store count of 368 doors, with a retail surface of 277,625 square meters. Of those 168 were trading under the Go Sport banner, including 11 franchises; 197 under Courir, including 17 franchises; and three as Moviesport. The group now has 22 Go Sport stores in Poland and 10 in Belgium, plus one Courir shop in Belgium.
