Frasers Group says SportScheck is “one of the leading sports retailers in Germany” and claims the purchase is part of a wider plan to grow its presence in the country.
SportScheck has 34 stores across Germany, a loyal customer base of over 13 million visitors per year and revenue of approximately €350m ($369m).
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Frasers Group believes SportScheck will benefit from its Elevation Strategy, which includes investments in concept stores, digital capabilities and strengthened brand relationships. Frasers Group also hopes to use its Sports Direct brand’s strategic partnerships with global sports brands such as NIKE and adidas to assist in its international expansion strategy.
Frasers Group CEO Michael Murray explains: “Acquiring the leading sporting goods retailer in Germany is a big step in our journey to becoming the number one sports retailer in EMEA – and we are delighted to do this with the full support of major global brand partners, Adidas and Nike. Growing and expanding our sports business is a key focus area in becoming an international retail business. The German market represents a huge opportunity for us, and we look forward to bringing our experience, resources and relationships to strengthen the SportScheck business.”
Adidas CEO Bjørn Gulden adds: “Michael’s elevation of Frasers Group and Sports Direct has been impressive. The acquisition of SportScheck is another big commitment to the sports industry and a natural evolution in their strategy of becoming a global player. We are committed and excited to support Sports Direct on their journey.”
Analysts at Shore Capital say this explicit endorsement from Adidas is a “significant highlight” that “not only strengthens the partnership between Frasers and Adidas but also underlines the strategic significance of the acquisition for both companies”.
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By GlobalDataFrasers Group says it expects the purchase transaction to complete in the first quarter of 2024, subject to merger control clearance.
Increasing investment in Asos
Meanwhile, Frasers Group has also announced that it has once again upped its stake at online retailer ASOS. It now has a 22.7% stake in the British business following the upped stake it made in August that took it from 15.1% to 16.9%.
Asos sales dropped by 15% in its most recent fourth quarter earnings report (September). It also warned that its second-half earnings are expected to be around the bottom of its guided range, however it added that it was still making progress with its turnaround plan.
A Frasers Group spokesperson declined to comment on either the SportScheck acquisition or upped stake in Asos.
However, Frasers Group’s most recent Asos investment comes just days after Frasers Group became the largest single shareholder at online fashion giant Boohoo Group.
Frasers Group also owns shares in Hugo Boss, N Brown and Mulberry, as well as a number of non-apparel retailers including Currys and AO.com. The group also purchased online fashion brand Missguided in 2022, however there have been rumours that this could be sold to Chinese fast fashion giant Shein.
In a statement shared in 2022 when Frasers Group first announced its shareholding in Asos, the company said: “Frasers Group has a long history (over 20 years) of making strategic investments to develop relationships and partnerships with other retailers, suppliers and brands, including by way of acquisitions of shares, options, contracts for difference and other financial instruments.
“The strategic investments Frasers Group makes offer new opportunities for the company, whilst also helping to support the long-term future of the existing retail businesses, and the many thousands of jobs they sustain.”
Commenting after Frasers Group’s recent additional purchase of Boohoo shares, GlobalData associate apparel analyst Alice Price said: “Boohoo reported a decline in revenue of 17.4% in the six months ending 31 August 2023, while retailer Asos saw sales decline by 10% in the year to 3 September 2023. Despite these unfavourable results, these pureplays still remain well ahead of pre-pandemic levels, so Frasers Group’s investments should turn out to be beneficial.”
