Euro-zone sports buying groups ecstatic after '08, offer cautious '09 forecasts

About the same time the economy across the Euro-zone was sputtering and sports buying groups wondered what '09 would hold, the Haribo Gummi Bear candy company gleefully announced, "We're not feeling a thing from the economic crisis." For those in the sports industries, the message wasn't as glowing, but it was still sweetly upbeat: 2008 finished with a single-digit uptick in revenues at sports retail after mostly disheartening results for the previous two years. And the forecasts for 2009, depending on who was talking, ranged from stable to as much as 3 percent growth on average.
Author:
Updated:
Original:

About the same time the economy across the Euro-zone was sputtering and sports buying groups wondered what '09 would hold, the Haribo Gummi Bear candy company gleefully announced, "We're not feeling a thing from the economic crisis."

"Our 5,000 employees at Haribo don't have to worry about a thing," the 85-year-old CEO Hans Riegel said, noting revenues forecast for 2009 of EUR 2 billion (USD $2.5 billion) for the German company. "We will make it through this year just fine."

For those in the sports industries, the message wasn't as glowing, but it was still sweetly upbeat: 2008 finished with a single-digit uptick in revenues at sports retail after mostly disheartening results for the previous two years. And the forecasts for 2009, depending on who was talking, ranged from stable to as much as 3 percent growth on average.

"The customer is now ready again to go shopping, thank goodness," said Andreas Rudolf, CEO of buying group Sport 2000 reporting full-year revenues up 5.8 percent over 2007 among its members with outdoor as the strongest category and interest climbing in health and fitness.

"Sport is the best investment," he added.



Single-digit increases to rejoice


At the ispo show, exhibitors and retail attendees didn't need to be told that sport was the best investment. They turned out in strong numbers to hear about the industry's status and check out new products (Click here to see our Feb. 4, 2009, story, "Mostly bubbling retailers pack show halls, express caution but are ready to buy.")

"There's snow outside, it's cold, and we're excited about the strong winter," said Roland Scheuermeyer of Intersport, the largest buying group, which reported increased revenues of 7 percent for 2008 over 2007 for its members. A year ago it had forecast growth of less than half that, or 3 percent.

The German association of sport retailers in conjunction with the international association also announced an increase in total revenues of 3 percent in Germany (EUR 7.1 billion or approximately USD $9 billion, up from EUR 6.9 billion or USD $8.7 billion) and 1.5 percent Europe-wide (EUR 37.5 billion or USD $47.5 billion, up from EUR 37 billion or USD $46.9 billion).

As usual monthly revenues fluctuated with the weather, with Intersport's numbers showing the lowest revenues in April 2008 (down 2 percent over prior year), and December showing a shot upward (up 11 percent). What pushed the numbers up in the last quarter of the year was the slamming arrival of winter and snow. Everybody rejoiced and sports shops saw registers ringing: Ice skates sold out, ski and snowsports helmets jumped off the shelves, and sales of outdoor gear flourished.

Outdoor still on the move

"Outdoor is the category that has been growing every single year," said Jost of Intersport. For example, it grew 14 percent in 2008 when overall sports revenues were stable, and grew 16 percent in 2007.

Other categories that remained positive for 2008, per Intersport numbers, were snowsports with growth of 11 percent (compared however to a decline in 2007 of 21 percent), multisport or cross-training up 4 percent (slightly down from the previous year's plus of 6 percent), and fitness with a positive of 3 percent (up from a decline in 2007 of 2 percent).

Top suppliers moving upward on both group's lists of its member's suppliers include Jack Wolfskin, VF Group and Mammut.

"The numbers reveal that we as the German sporting goods industry managed again in 2008 to unhitch ourselves a bit from the continued economic recession," said Werner Haizmann, president of FEDAS, the international sports retail association, and VDS, the German sports retail association.

"Sport is once again a 'mega-trend' all around Europe," he added.

And for 2009?

Ending the year on a high note doesn't mean, however, that 2009 will be easy, sports group and association representatives said in separate presentations, press conferences and statements. All mentioned the importance of service and education at retail to keep the consumer buying.

"Consumers are seeking trust and orientation with personal contact," said Sport 2000's Rudolf.

Intersport's representatives mentioned that in an economic crisis, creativity, cost management and building the customer relationship are all-important.

"In the sports retail industry, selection, service and value," Haizmann said, can be the deciding factors when it comes to continuing to exist or not. Mediocre is 'mega-out.'"

The forecast is still positive, with Intersport at the 2009 winter ispo show revealing its revenues for the just-completed last week of January: An increase of about 5 percent over January 2008, which was down more than 6 percent, putting the group up over a year ago by nearly 12 percent. Sport 2000 also said the just-finished month looked to show double-digit growth.

Still, the groups laid out a more conservative year-over-year forecast for 2009: Intersport is planning for a stable return, while Sport 2000 said the year could be between 1 percent and 3 percent up.

"A growth of 3 percent may be extreme for 2009," said Sport 2000's Rudolf. "Even 1 percent would get people pretty excited."

--Therese Iknoian

Related

EconomicReports.JPG

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

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 ...read more

Euro-zone sports economy finishes '05 high, thinking positive for '06

Reports out of the European markets, including from buying groups at February's ispo show in Germany as well as from banks and economists, show the economy in general and the sporting goods markets specifically ending on a high note for 2005. "We had a picture-perfect last ...read more

European sports buying groups hoping for a better 2007 after dismal end to 2006

My, how things change in a year. Last year as the two key buying groups in Europe, Intersport and Sport 2000, presented their just-finished year along with a forecast for the coming year to the press on the first day of the winter ispo sporting goods show, everyone was aglow. ...read more

EconomicReports.JPG

Consumer sports and fitness spending plans remain cautious, but show positive trend

A recent report has found that despite economic gurus touting the start of a recovery, most consumers remain cautious in their 2010 plans for spending, including on sports, recreation and fitness products. Still, a trend began this year that indicates the market for ...read more

ForzaniGroupLogo.jpg

Canadian Tire bids to buy country's largest sports retailer group

A Canadian diversified retailer of everyday home, auto, outdoor and fitness products has made an offer to buy Canada’s largest chain of sporting goods stores for nearly USD $800 million. Canadian Tire Corporation (TSX:CTC) announced plans May 9 to purchase The Forzani Group Ltd. ...read more

Outdoor financials: VF Q4 profit jumps 51 percent, plus Kellwood accepts Sun Capital's takeover bid, Timberland, Amer Sports, Dorel buys Cannondale and Sugoi, Luxottica/Oakley, LaCrosse, Sport Chalet

VF Q4 profit jumps 51 percent VF Corp. (NYSE: VFC) posted a 51-percent jump in fourth-quarter profit as sales improved, boosted by new brands. The company is the parent of various outdoor brands, including The North Face, JanSport, Eastpak, Eagle Creek, Vans, Kipling, Napapijri ...read more

Retailer, supplier, buying groups assess Europe's retail scene

Retailer and manufacturer associations, as well as buying groups, use the February ispo sporting goods show in Munich, Germany, as an opportunity to discuss the past year's sales, how different categories are doing, and what the coming year seems to be shaping up like. This year ...read more

groupon_logo.jpg

Groupon rides group-buying wave

On Nov. 9, Michigan-based retailer Moosejaw launched a promotion on the Groupon website, allowing consumers to purchase $50 worth of gear for just $25 -- if they used a coupon. “Let’s see…it’s only 10:30 a.m. and almost 2,000 people have bought into it,” Sarah Rewold, Mooosejaw’s ...read more

Fitness financials: Brunswick plans tender offer to buy back $75 million in debt, plus Forzani Group, Costco

Brunswick plans tender offer to buy back $75 million in debt Brunswick Corp. (NYSE: BC), parent of Life Fitness, said it has launched a tender offer to buy back up to $75 million of its debt. The tender offer will close Sept. 30. It will purchase the 11.75 percent senior secured ...read more