SportZone, the major Portuguese retail chain specializing in sporting goods, reported an annual turnover of €143 million for 2007, up by 14 percent when compared to the previous year. Only part of the growth was due to the opening of new stores, as the total selling area of the chain rose by 8 percent to 44,000 square meters. The number of stores went up to 57 by the end of the year from 44 at the end of 2006, and three more SportZone stores have opened since the beginning of this year.
The Sonae Group, a large diversified Portuguese conglomerate that also owns supermarkets and shopping centers in various countries, plans to continue to invest in new sporting goods stores in Portugal and elsewhere, notably in Spain and in Italy. As in Portugal, its biggest competitor in all three countries will be Décathlon, but SportZone seems to have found the recipe to fight against it, working through smaller stores and carrying more branded items next to its exclusive products.
We are going to discuss the competitive situation in Portugal and Spain in a major new market research report on the sporting goods market throughout the Iberian peninsula, which is due to come out next month along with a report on the market in Greece, Turkey, Cyprus and Malta. The growing integration between the Portuguese and Spanish economies is one of the aspects that has emerged from our groundbreaking research.
After a first attempt to penetrate the Spanish market in 1998, which ended up in failure, SportZone will re-enter the country this year. It will open four stores in the country in the next few days, one on the periphery of Madrid, and the others in various shopping centers in the region of Galizia. The locations were not disclosed, but it is understood that they will have a similar size and look like the Portuguese stores, which generally measure between 300 and 600 square meters, that they will carry some of its exclusive products and that some of the clothing will be adapted to Spanish tastes.
The company’s first attempt in Spain 10 years ago did not succeed because it occurred only one year after Sonae set up its first SportZone in Portugal, when it still didn’t have enough experience. SportZone entered the country then by taking over the local business of Giacomelli Sport.
SportZone gives itself three to four years to reach the break-even level in Spain. It will also continue to open stores in Portugal. The general goal is to become a retail chain of Iberian dimensions, with a total of about 100 stores in the peninsula by 2010.
Furthermore, the company is making plans to expand to other markets, and Italy should be next. It has already started to look for suitable sites, planning to sign the first leases in the second half of 2008 and to open the first Italian stores at the beginning of 2009.
With the aim of driving productivity gains and operating profitability, the company will also implement in the short term a range of cutting-edge projects in the areas of logistics infrastructure, stock management optimization and store operations.
In addition, Sonae Distribuição, the subsidiary of Sonae Group that runs SportZone, will extend its activities to two new businesses: insurance brokerage and the launch of a new chain of casual footwear stores.
