Expected Discounts in Sports Retailers

Expected Discounts in Sports Retailers

As other industries grapple with supply chain issues, the sports trading sector is dealing with too-full warehouses, says Sport-2000-Chef Holger Schwarting. This situation affects not just retailers, but also suppliers.

After enduring shortages during the pandemic, Schwarting doesn’t anticipate similar issues this year. In fact, he notes, especially with bicycles, there is an excess of product on the market. This surplus will likely lead to discounted prices, particularly for older models that retailers aim to sell off to make room for new stock. He predicts that the situation in the overstocked warehouses will stabilize only next year, with 2024 still posing challenges.

Headquarters in the Gmunden District

In the face of such challenges, the Austrian branch of Sport 2000 will operate as part of the ANWR Group. Following the bankruptcy of the Sport 2000 cooperative Zentrasport, it was decided to acquire the sports retailer association in January. The goal is to launch a new entity by May or June. However, this entity will not be a cooperative as before, but a GmbH owned by the ANWR Group. The headquarters will stay in Ohlsdorf in the Gmunden district and Sport 2000 will remain a license partner of Sport 2000 International, assures Schwarting.

For independent dealers, little will change, emphasizes Schwarting. Around 150 sports retailers with about 220 locations are anticipated to be part of the restart. This is a significant reduction compared to the previous 229 dealers with 367 locations. However, this doesn’t imply that these dealers will not exist in the future. Schwarting explains that about half of the retailers who will no longer be part of the Sport 2000 Group have failed a financial examination by the central regulatory bank DZB. The remaining half comprises retailers who are uncertain about the future, those who no longer wish to be involved, and natural departures such as retirements.

Decline in External Sales

Another major change is in liability. In future, if a retailer faces payment difficulties, the liability will lie with DZB Bank GmbH instead of the Zentrasport cooperative. This change offers security to suppliers but also comes with a cost, points out Schwarting. He also predicts a significant drop in external sales in Austria. Schwarting estimates that future external sales will be around 420 million euros, a considerable decrease from the previous figure of around 700 million euros. This shift will result in a market share of about 20 percent, down from just over 30 percent.