Sportmaster has reinforced its dominant market position in Russia, announcing that it will once again start offering products under the Adidas brand from the autumn/winter 2019/20 season, after many years of separation.
Sportmaster considers itself as a strategic partner of Nike, and it also offers brands like Puma and Asics. However, Adidas, which has a longer history in the market, had preferred to sell its products exclusively through its own stores, which were as many as 1,000 until recently, but as we have already reported, it decided to close some of them lately.
Meanwhile, Sportmaster has launched a dedicated new chain of stores for its biggest private label, Demix, which is positioned in a lower, more affordable segment of the market. It has become the group's sixth retail chain in Russia.
The group opened the first store under the Demix banner at the end of last year in the Gagarisnky shopping center in Moscow. Two other stores have since been opened in two other Moscow malls and one in Krasnodar, a thriving city with a population of one million people in the southern part of the country. In total, Sportmaster plans to add 15 doors to the new network by the end of 2019, focusing primarily on the Russian capital and the cities with the biggest populations.
The ultimate goal of building a new chain is to change the public perception of the Demix brand, so the customers in Russia no longer consider it as only an entry-level sports brand. Demix offers medium-priced athletic and sports lifestyle apparel and footwear items for adults and juniors in various categories including running, fitness, training and active lifestyle.
Demix accounted recently for nearly five percent of sales in Sportmaster stores. There are around 2,200 SKUs being sold under this brand, which is clearly not enough to build an independent retail network. Sportmaster will have to expand the range to around 3,500 items in order to ensure that the new network operates sustainably, according to a local analyst.
Sportmaster operates more than 500 stores in Russia, Belarus, Kazakhstan and China. The Demix chain may also be developed in some of these other countries in future.
In addition to branded products, the company sells broad range of sports and outdoor items under other private labels: Delamare, Joss, Nordway and Outventure. Prominent western sports brands like Fila, Kappa and Merrell also have exclusive licensing agreements with Sportmaster for the Russian market.
In addition to the Sportmaster network and the new Demix stores, the big Russian retail group is also running four franchises: Sportlandia and Weekender, plus many mono-brand Columbia and Skechers stores. Sportlandia is a chain of multi-sport stores for the smaller cities. Weekender is a chain of stores for active outdoor and travel enthusiasts
As outlined in our global retail chart at the end of last year, Sportmaster was the world's 21st largest retailer in 2017 with sales of nearly $1.4 billion, up by 5.9 percent in local currencies as compared to 2016.
