Intersport, the world's largest sporting-goods retailer, is planning to branch out from its European home turf for an increased presence in the North American market over the next two years.
Through a twenty-year agreement with The Forzani Group Ltd. (FGL), Canada's largest sporting-goods retailer, Intersport hopes to break into the large and lucrative markets in Canada and the United States. The agreement calls for both the development of the Intersport name and increasing the distribution of Intersport product.
Forzani currently owns 6.5 percent of Intersport International, and owns and operates 132 corporate stores and 156 franchise stores. Forzani sales at retail topped 500-million dollars in fiscal 1999.
Phase one of this agreement will see Forzani's franchise group, Podium Sports, change its name to Intersport. Podium Sports represents 47 of the 288 retail stores Forzani controls.
“Out of all our retail systems-which include Sports Shack, Sports Experts Econosports, R & R, and Zone Athletic-Podium was chosen as the best fit for Intersport,” says Tom Quinn, CEO of Forzani.
“The conversion, which will cost around 1.5-million Canadian dollars, will take place in March and April,” says Quinn. “Another 25 stores from our 288-store system will also be eventually converted.”
There are no plans to convert the other Forzani-controlled retailers, and Quinn suggests that there's plenty of room in the current market for several systems to coexist.
The Forzani Group is also establishing a private-label division to sell established Intersport brands in Canada. These brands include McKinley outdoor clothing, Nakamura bikes, and Firefly extreme-sports products.
“Although we're currently the largest retailer of snowboards in Canada, with 30 percent of the market,” says Quinn, “we're still discussing whether to carry Intersport's Crazy Creek snowboard brand-which is one of the best-selling brands in Europe. Given that we have 250 stores that carry snowboards, it's not that hard for us to establish a new brand in the market.”
Intersport sold 30,000 Crazy Creek snowboards last year, mostly through its 1,100 stores in Germany.
U.S. Plans Modest For Now Plans for the U.S. market will start simply with supplying these private-label products to existing Foranzi retailers in the U.S.
“This will allow U.S. retailers to gain a greater understanding of the products, benefits, and operations of Intersport,” says Quinn. “Retailers that carry our lines will then have an opportunity-probably in around eighteen months-to buy into the Intersport system and become Intersport retailers.”
The Intersport system effectively works as a large buying group, with member retailers offered both Intersport's own brands and the benefits of their huge buying power for other major brands.
Intersport International Corporation IIC sets marketing and store-format guidelines but also operates as a buying group for the national member organizations.
The Forzani group hopes to benefit through being able to tap into Intersport's 4,300-store, 5.7-billion-dollar-in-sales buying power to get better deals from suppliers.
However, according to Quinn, all Forzani retailers will benefit-not only because of the better prices on product, but from the consumer perception of shopping at the world's largest sports retailer.