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Fresh OEM Opportunities as Russian Sportswear Giant Annexes Poland

With Sportmaster acquiring Go Sport's Polish retail network, suppliers expect to see orders soar over the near-term.

Photo: Sportmaster: Looking for healthier profits through aggressive expansion and strategic acquisitions.
Sportmaster: Looking for healthier profits through aggressive expansion and strategic acquisitions.
Photo: Sportmaster: Looking for healthier profits through aggressive expansion and strategic acquisitions.
Sportmaster: Looking for healthier profits through aggressive expansion and strategic acquisitions.

Sportmaster, Russia's largest sportswear retailer, has acquired Go Sport's Polish operations. The Moscow-headquartered retailer – the third-largest sporting-goods vendor in Europe and a key client for more than 150 Hong Kong and mainland China-based OEM suppliers – is believed to have made the move as it looks to drastically expand its overseas operations.

Go Sport Poland, which comprises 34 stores with a combined floor space of 37,000 square metres, was previously owned by Go Sport Polska, itself a subsidiary of the Grenoble-based Go Sport Group. In the immediate aftermath of the acquisition, the Polish outlets will continue to trade under the Go Sport brand, with the Sportmaster identity set to be phased in at a later date.

For many, the acquisition has been seen as just the latest chapter in the remarkable rise and rise of Sportmaster. Now one of Russia's largest retail concerns, the company was launched by three local businessmen – Dmitry Doikhen and the brothers Vladimir and Nikolay Fartushnyak – in 1992. Despite now operating 500 stores across Russia, Belarus, Ukraine, Kazakhstan and China, the company remains in private hands.

Sportmaster's international expansion began in earnest in 2012, when it incorporated its operational headquarters in Singapore. This was seen as partly to protect its business interests in Ukraine against any deterioration in the country's relationship with Russia, as well as to help pave the way for its later move into Azerbaijan and Georgia. In 2014, it extended its retail operations beyond the borders of the former Soviet Union for the first time, opening outlets in the Heilongjiang and Jilin provinces of Northeastern China.

Now, its priority will be bedding in its newly acquired Polish retail network. As well as putting distribution in place for the global brands that form part of its standard inventory, it will also be looking to introduce Polish consumers to its proprietary brands – most notably Demix, its most high-profile own-label offering. Once that process is completed, it is expected to look for further expansion opportunities, with Slovakia – a 5.5 million-strong nation bordering Poland – thought likely to be its next target.

In addition to its own retail chain, the company also manages 700 outlets for O'Stin, its proprietary casualwear brand, as well as the Russian franchises of two US sporting goods companies – Columbia and Skechers. Indeed, until recently, it had the biggest turnover of any company in the Russian clothing / footwear sector.

In August, however, it was overtaken by the online retailer Wildberries, which reported US$959 million worth of clothing / footwear sales in the first six months of this year, considerably higher than the $791 million reported by Sportmaster for the same period. This is believed to be the first time an e-commerce vendor has occupied the number-one slot in this segment of the Russian retail market.

Sportmaster sources much of its stock via its Shanghai purchasing office, which sees it working with some 150 Hong Kong / mainland-headquartered suppliers and distributors. Businesses looking to join this roster or extend their contracts in light of the group's new requirements should use the Shanghai office as their first point of contact.

Leonid Orlov, Moscow Consultant

Content provided by Picture: HKTDC Research
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