Euro-based sports buying groups report positive year-over-year revenues, forecast continued gains

Cautious forecasts for 2009, given a year ago during the ispo show after a mediocre 2008 at retail, weren’t what became reality in Euroland. We take a look at the economic summaries and the forecasts for Euro-zone countries, as given by Germany-based sports buying groups and other associations. 2010? The prognosis isn’t so cautious this time around.
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Cautious forecasts for 2009, given a year ago during ispo after a mediocre 2008 at retail, were for naught: Not only did the Euro-zone sports buying groups, Intersport and Sport 2000, report gains nearly across the board in all categories, but they also looked ahead to 2010 with less hesitancy.

“Negative results are dumb,” said Klaus Jost, head of marketing and sales for Intersport, at a press conference at the 2010 ispo winter trade show in Germany. He said the prognosis was to “plan, plan, plan” for an average gain of 10 percent in 2010.

Interestingly, while the sports buying groups and other sports-oriented retail and manufacturer groups were gloating over the generally positive trend, general retail was in a continued nose dive. Per a government report from just four days before the start of the ispo show summarized in the German press, specialty and independent retailers at least in Germany had experienced their worst setbacks in sales since the reunification of then-East and West Germany and the start of joint statistic-keeping in 1994. Revenues sank for 2009 by 2.4 percent nationally. Also reported was that unemployment continued to rise, therefore dampening the eagerness of consumers to spend money – a trend not forecast to come to a halt in the next year.

A report two weeks later in mid-February from economists showed that economic expectations slid downward again in February, and are expected to “move sideways,” the president of the Center for European Economic Research, Wolfgang Franz, told the Wall Street Journal.

Snowy winter arrived as did sales

Part of the glee on the part of sports groups, manufacturers and retailers were a result of a hard-core, snowy, cold winter across much of Europe that blew in by December and refused to leave.

“Snow and ice are a blessing,” Jost said.

The outdoor and snowsports categories certainly did particularly well, but that didn’t mean others, such as fitness and running, were dogging it. Click here to see our Feb. 12, 2010, overall report about the ispo show, “Show regains numbers lost, continues with energy and breadth.” You will also find specific reports about outdoor, fitness, BrandNew awards and more if you go to www.snewsnet.com/tradeshownews and click on “trade show news,” and then “ispo.”

On average, retailers with the Intersport group averaged 7 percent revenue gains in 2009 over 2008, while those with Sport 2000 averaged a 6.4 percent gain. That compared to mid-single-digit upticks for 2008. A year ago, the two groups had forecast for 2009 everything from status quo to possible 3 percent growth, which a year ago was called “extreme” by Sport 2000 director Andreas Rudolf. How wrong they were.

“The year 2009 was …an especially successful year despite what was going on with the economy,” said Jens Fischer, a managing director for Sport 2000.

For 2009, by category:

>> Snowsports: Intersport showed a gain of 24 percent, while Sport 2000 reported gains of 22.5 percent. (Sport 2000 also broke out the helmets category separately because of the booming sales with a recent emphasis on safety and said when viewed alone showed an increase of 43 percent in 2009 over 2008.) Even Intersport spokesman Jost said, “Helmets are flying off the shelves like hotcakes.”

>> Outdoor: Both groups showed similar gains of 18 percent year-over-year.

>> Fitness/Workout: Intersport reported gains of 4 percent, while Sport 2000 showed a positive trend of 5 percent.

>> Running: Experiencing a revival in Europe in the last few years, the running segment was reported by both groups as experiencing a 3 percent uptick.

>> Downers: Team sports hit the skids, while lifestyle and fashion were either flat or down.

January 2009 sales skyrocketed due to huge snow storms, October 2009 did second-best, with April also showing double-digit gains. November took a nosedive as consumers moaned about the lack of winter, but December again charged ahead.

Interesting numbers by Intersport reported revenues and average growth by category in the last two years: Outdoor hit sales of EUR 500 million (USD $648 million), for an increase of EUR 140 million (USD $181 million) in the last two years; snowsports hit EUR 480 million (USD $622 million), also an increase of EUR 140 million (USD $181 million); so-called wellness hit EUR 450 million (USD $583 million), or up EUR 20 million (USD $26 million); while fitness and running hit EUR 260 million (USD $337 million), for an increase of EUR 12 million (USD $15.6 million). (USD figures approximate since currency fluctuates and none of the reported sales are applicable to non-European countries.)

The German association of sport retailers in conjunction with the international retail association also announced an increase in revenues of 3.5 percent reaching EUR 7.1 billion to EUR 7.3 billion (USD $9.2 billion to $9.7 billion).

“Sport in general and snowsports in particular are a strong trend, market researchers reported,” said Werner Haizmann, president of the retail group VDS, in a statement. “They are of the opinion that sport activities also in times of recession and tight budgets retain a particularly strong value for personal health.”

What about the rest of this year?

Since the ispo show this year was held two weeks later (it alternates annually due to conflicts with another large show in Munich), the four-day event kicked off Feb. 7, allowing some time for buying groups and others to assess the start of 2010.

“This year has begun well, too,” said Ullrich Lueke, spokesman for Sport 2000, pointing to overall gains among its retailers in January of 1.2 percent.

Forecasts set out by Lueke’s group showed expected gains in all categories -- except lifestyle and fashion. There the prognosis was for a disappointing drop of 5 percent.

“The trend is going backward,” said director Fischer.

Otherwise, trends are moving forward. Sport 2000 forecasts that all snowsports will grow 5 percent (helmets when broken out separately showing 15 percent), outdoor will grow 15 percent, fitness will increase 3 percent, and running will be up 3 percent.

Intersport, too, sees overall long-term positive growth, partly also due to the continued emphasis on health and wellness. That group predicted today’s market worth EUR 240 billion (USD $311 billion) will in 2020 be worth EUR 450 billion (USD $583 billion in today’s currency values) and will represent approximately 5 percent of consumer’s spending.

As Jost said, they are looking optimistically to hit as a group 10 percent -- although even 3 percent wouldn’t be so bad. Remember, per Jost: “Negative results are dumb.”

Now if only the weather will cooperate.

--Therese Iknoian

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