Swedish sports retailing is undergoing yet more changes this month with the acquisition of Sportex, an integrated retailer with two banners, by Team Sportia. This buying group was already the third-largest sports retailer in Sweden with 112 stores and sales of nearly 2.4 billion Swedish kronor (€258.6m-$328.9m) last year, but the enlarged group should reach a joint retail turnover of more than SEK 3 billion (€323.3m-$411.1m).
Sportex includes the integrated chain of the same name, with sales projected at about SEK 250 million (€26.9m-$34.3m) in 20 stores this year, focusing on footwear and bicycles. It further comprises Sportringen, a buying group with 54 stores and sales projected at about SEK 450 million (€48.5m-$61.7m), which was acquired by Sportex five years ago.
Team Sportia bought Sportex from Sjätte AP-Fonden, an investment fund, which itself acquired Sportex from its founder, Robert Jarl, in 2004. Team Sportia indicated that the transaction was not expensive and could be financed through its own funds, given the fact that the Sportex group had not been profitable.
The purpose of the acquisition is to increase the buying and sales volume of Team Sportia, at a time when the otherwise healthy Swedish market is bracing itself for heightened competition. As reported last month, XXL of Norway is opening three mega-stores in Sweden (see previous issue), which should unleash more price competition in the Swedish market.
The acquisition of Sportex comes only a few months after Fredrik Andreasson took over as general manager of Team Sportia. He explained that among many other strategic advantages, the deal would enable the group to fill quite a few gaps in its geographic coverage, and to become the market leader in bicycles sales – a category in which both Team Sportia and Sportex are particularly strong.
Plans for a tie-up between Team Sportia and Sportex had already been discussed and were highly advanced a few years ago, but unexpectedly fell through. In the meantime, Team Sportia has also adjusted its strategy by severing its buying contract with Sport 2000 International. Although Team Sportia continues to hold talks with Sport 2000 on and off, it has quit purchasing through the international buying group.
The management of Team Sportia is holding talks with employees to come up with detailed plans, due to be made public later this month, for the integration with Sportex. Lars-Åke Tollemark, who had headed Sportex for the last six years, left the company when the takeover was confirmed last week and will start as operations manager at Unibail-Rodamco Nordic in October. Andreasson is acting general manager at Sportex for the time being.
For its part, Intersport Sverige, which still is the largest buying group in the country with 153 stores and sales reaching nearly SEK 4 billion (€431.0m-$548.1m) last year, has already prepared for a shake-up of the market by acquiring shares in some of its weightiest members. The process started three years ago with the acquisition of a 50 percent stake of the Intersport Gothenburg group, consisting of nine regular stores and another store for clubs and corporate customers. The following year Intersport Sverige bought half of Majema, a group of 16 regular stores and one outlet. And from the beginning of next year the buying group will own 50 percent of a third group, Skånes Fritidsbutiker, which has seven stores in Malmö.
Entirely financed by Intersport Sverige, these buys are meant to firmly establish Intersport’s retail concept in the three towns that most strongly influence sales and the retail landscape in Sweden. Furthermore, it fits with the strategy launched by Intersport Sverige to increase central buying and improve margins. The products offered by the Intersport stores half-owned by the buying group all come from central buying, but thenn the average within the group has also increased to an estimated 95 percent of all the products sold in the affiliated stores. Intersport has been rewarded with robust sales growth so far this year, and in the first four months of the year it was even distinguished as the clothing retailer drawing the largest number of customers in Sweden – ahead of such rivals as H&M.
Separately, anticipating more aggressive competition in the Swedish market, Intersport Sverige is studying the opening of Budget Sport in the country. The company said the introduction of Intersport’s low-budget sports banner in Sweden was only a matter of timing.
