Universal Sport, a Swiss sports retail chain that is Intersport's largest member in the country, will halt its operations by the end of October. The official explanation is that the financing of the upcoming winter season was not secured as Intersport no longer provided any financial warranties for further purchasing. The company, therefore, did not see any alternatives to shutting down operations.
Sources familiar with the situation at Universal say that the reasons for its problems go further than a lack of financial reserves: It is about the massive structural changes that Swiss sporting goods retailing has been going through for the past two-three years, notably due to the strong Swiss franc encouraging Swiss shoppers to buy in the neighboring Eurozone.
Apparently, Intersport did what it could in the framework of the group's rules to support the ailing retailer, but at some point a line had to be drawn and the group could not give the chain further assistance. Intersport Switzerland's retail structure is healthy in the sense that it does not depend on one dominant retailer as is the case in other countries. Currently, the Swiss buying group has 200 franchises and 44 purchasing partners, which altogether operate 372 stores around the country.
Most recently, Universal Sport had annual sales of slightly above 10 million Swiss franc (€8-1m-$10.8m) and currently operates eight stores, one of which is located in Liechtenstein and three others are positioned as low-budget sports shops. Universal Sport does not have an online shop. On behalf of the management of Universal Sport, Peter Burch, chairman of the supervisory board, said that the management is trying to find a solution for the troubled retailer, be it the sale of the company as a whole or in parts, by the end of August. We understand that the Swiss Intersport licensee, PSC Holding, may be interested in acquiring some of Universal's stores.
In May 2010, Universal Sport came under a new management led by Paul Misteli, a Swiss retail veteran, whose strategy was to shut down shops smaller than 500 square meters and to push the “Sports Outlet Factory,” a low-budget retail format, which was set to contribute some 30 percent to Universal Sport's total sales. The original plan was to increase turnover to CHF30-45 million (€24.4-36.6m-$32.4-48.6m) over the following three to five years. The plan failed. Instead, the retailer had to downsize here and there, most recently by giving up the retail format “Feel!” - a concept for selling sports-inspired fashion.
