Groupe Go Sport S.A.

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Groupe Go Sport S.A.

17, avenue de la Falaise
38360 Sassenage
France
Telephone: ( + 33) 4 7628 2020
Fax: ( + 33)4 7628 2099
Web site: http://www.go-sport.fr

Public Subsidiary of Groupe Rallye S.A.
Incorporated: 1976 as Société Alpine de Sport
Employees: 4,500
Sales: FFr 4.35 billion ($621 million) (2000 consolidated)
Stock Exchanges: Euronext Paris
Ticker Symbol: 3292.PA
NAIC: 451110 Sporting Goods Stores

Groupe Go Sport S.A. is one of the leading sporting goods retailers in Europe. With a 16 percent market share in its home country of France, Go Sport is that country’s second largest sporting goods retailer, yet remains far behind dominant player Decathlon, a member of the Auchan group, which has captured 50 percent of the total sporting goods retail market. Where Decathlon realizes the largest part of its sales with its own-label goods, Go Sport has established itself as a seller of major brand names, while also promoting its own labels, Go Sport, for its sporting goods, and Wannabee, for its sports-related clothing. Go Sport’s own label sales account for less than 20 percent of its sales. To counter the strength of Decathlon—which has been accused by both Go Sport and rival Intersport of abusing its position of dominance in the French market—Go Sport has announced its intention to step up its number of new store openings to as many as 30 new stores per year. Targeting primarily midsized cities, the average Go Sport has roughly 1,500 square meters of selling space. Go Sport also has been targeting international growth since the late 1990s, moving into Poland in 1999 and Hungary in 2000, with plans to expand into other international markets in the early years of the new century. Go Sport also is present in Belgium and Spain. With 70 percent of its shares held by Groupe Rallye—which also holds 54 percent of the French hypermarket and supermarket group Casino and 100 percent of American footwear retailer Athlete’s Foot—Go Sport completed a takeover of another Rallye subsidiary, the sporting shoe chain Courir, at the end of 2000. The newly enlarged company had consolidated sales of FFr 4.35 billion ($621 million) and a network of more than 252 stores, including 107 Go Sport stores, which contributed FFr 3.35 billion, and 140 smaller Courir stores, adding nearly 740 million. The merged company also included several Moviesport stores, a sports clothing chain created by Courir in the late 1990s. Some analysts have viewed the merger of Go Sport and Courir as a prelude to a possible spin-off by Rallye, as that group, in the wake of the Promodes-Carrefour merger of 1998, eyed a potential merger with Auchan. Groupe Go Sport is led by CEO Charles Setboun.

Sporting Goods Alternative in the 1980s

A growing interest in physical fitness and in leisure sports in France in the 1970s saw the rise of a growing number of sporting goods specialist retailers, including the creation of the Decathlon chain, associated with the Mulliez family of the Auchan retail empire. Auchan was not alone in its interest in sporting goods: a number of other of France’s hypermarket and supermarket chains also set out to stake a claim to the fast-growing market for sporting goods and related articles. Among them was the Genty-Cathiard group, originally founded in the 1920s, and Docks de France, which had been one of France’s leading hypermarket groups until its absorption by Auchan in 1994. A number of other retail groups joined the sporting goods market in the 1980s, including the appliance specialist Darty, and the FNAC chain.

Yet it was the Mulliez family who had been among the first to recognize the new potential of the sporting goods market, which was helped especially by France’s newfound interest in such activities as jogging and aerobics, the rapid democratization of skiing and other winter sports, and growing numbers of hiking and bicycling enthusiasts. The country’s other supermarket groups found themselves in the position of playing catch-up to the Mulliez-Auchan group. Genty-Cathiard’s entry into sporting goods came in 1976, when it created a specialized subsidiary, Société Alpine de Sport, and launched a chain of sporting goods stores under the Team 5 name. One year later, Docks de France prepared its own entry into the booming sporting goods market, creating the Go Sport store concept.

The first Go Sport opened in Paris in 1978. The success of the initial store encouraged Docks de France to expand its sporting goods division, adding new stores in Paris and then in other major cities in France, while also moving across the Belgium border in 1980 to open its first store under its new Go Sport Belgique subsidiary. During the same period, Genty-Cathiard also had been building its sporting goods interest, notably through its Team 5 chain. The Team 5 signage also was exploited by another group, SEGMAS, which built up its own network of six stores before merging into Genty-Cathiard operations in 1983. At the same time, Docks de France returned to its supermarket core, selling off its growing Go Sport chain—which had reached 11 stores in the early 1980s—to Genty-Cathiard.

The acquisition of the Go Sport chain led Genty-Cathiard to merge all of its sporting goods interests into a single subsidiary, with Société Alpine de Sport, SEGMAS, and the Team 5 store name giving way to Go Sport in 1984. The newly formed Go Sport group now boasted 25 stores, making it France’s largest network of sporting goods stores. Yet that lead was only temporary, as the Auchan group built up the Decathlon chain’s dominant position before the end of the decade.

Under Genty-Cathiard, Go Sport saw a slow but steady expansion into the mid-1980s, with the company’s concentration remaining on the French market. Yet the company continued to build up its interests in Belgium, which saw five Go Sport stores by the end of 1986. In that year, Genty-Cathiard placed Go Sports stock on the Paris Bourse’s secondary market. The public offering gave Go Sport the financing to pursue a newly aggressive expansion program.

In 1987, Go Sport was presented with new opportunities for growth when both FNAC, which had opened FNAC Sport sporting goods stores in Lyon and Paris, and Darty, which, under its subsidiary Société de Diffusion Sport et Loisirs, had built up a chain of 11 Sparty sporting goods stores, decided to exit the sporting goods market. The acquisition of these new stores, coupled with the acquisitions of southern France-based sporting goods specialist Sports Sud and the Team 5 stores operated by the Société Nouvelle de Sport, enabled Go Sport to boost the number of its stores to 54—including 50 in France. Those stores soon were joined by a new store—and an entirely new market—by the end of 1987, when Go Sport entered the huge—and hugely competitive—U.S. market.

The first Go Sports store in the United States was joined by a second in 1988, and a third—and last—store in 1989. By then, Go Sports had made a number of other expansionist moves, including the acquisition of 50 percent of the group SPAO, a distributor of sporting goods in the Rhone-Alps region, in 1988. Go Sport took full control of SPAO in 1989, adding the company’s ten stores to its growing network. The company also attempted a new international market in 1989, launching its first Go Sport in Spain. A second Spanish store was to open the following year. Genty-Cathiard’s sports interests, meanwhile, had expanded beyond the Go Sport name, when it acquired the Courir chain of 16 retail sports footwear stores, established at the beginning of the 1980s.

Playing Catch-Up for the New Century

Go Sport’s rapid expansion through the 1980s had left it in financial disarray as the decade came to a close. By 1989, the company’s losses mounted to FFr 127 million on sales of FFr 1.1 billion. Genty-Cathiard, which had remained relatively modest-sized in a distribution climate marked by the rise of just a few giant retail groups, such as Auchan, Rallye, Carrefour, Ledere, and others, itself bowed to the pressures of the highly competitive French retail scene when it agreed to be acquired by the Rallye group in 1990. Rallye, which had acquired control of the successful U.S. sports footwear specialist Athlete’s Foot, placed Go Sport and Courir under its Sports division.

Under its new ownership, and now led by André Crestey, Go Sport was given a thorough reorganization. As Crestey described Go Sport’s condition to La Tribune: “The stores were in bad shape, the personnel were unmotivated, and there was no enterprise-wide strategy to guide the various names.” The company closed down a number of its underperforming French stores in 1990 and 1991. With new management in charge of Go Sport, the Go Sport name became the sole name for the company’s entire chain, replacing the various stores’ names inherited through acquisitions and kept in place under Genty-Cathiard. These moves helped Go Sport cut its losses, down to FFR 53 million in 1990 and to just FFr 8 million in 1991. By 1992, after the company sold off its Spanish and U.S. stores, Go Sport was once again able to show profits, of FFr 20 million. More store closings followed into the mid-1990s, now accompanied by a number of new store openings and the remodeling of a large number of existing locations. The company’s chain now was stabilized at 75 stores in France and six stores in Belgium by the middle of the decade.

Company Perspectives:

With its know-how and financial health, and a market growing by 5 percent each year, the group Go Sport is able to consecrate itself on an intense development both in France and internationally. The perspectives are for 13 to 18 points of supplementary sales in 2000 and for 20 to 30 new stores each year starting from 2001.

Accompanying the company’s revamp of its retail network was a number of strategic capital investments, including the construction of a new distribution facility in Amiens, the opening of a new central buying facility, and the modernization of the company’s computer technology. By the end of 1995, Go Sport had boosted its annual sales past the FFr 2 billion mark. With all of the company’s stores now operating under the single Go Sport name, the company stepped up its employee training efforts, boosting the number of services stores offered to clients while also helping employees achieve a greater professionalism. Go Sport also began preparing to introduce its own brands—a formula that had helped Decathlon become France’s dominant sporting goods specialist.

The remodeling of the Go Sport chain took on greater steam in the late 1990s as the company completed the remodeling of more than 70 of its stores between 1996 and 1997, as well as expanding more than ten of its sites into a new, larger-scale format. The company also once again began opening new stores, with three new stores in 1996, six more in 1997, and seven more, including a new Belgium site, in 1998. That year also saw the company’s sales jump as Go Sport reaped the benefits of France’s hosting of the Soccer World Cup, which culminated in France’s victory. The company also quickly began reaping the advantages of its inhouse labels—Wannabee and Go Sports—which swiftly rose to account for some 20 percent of the company’s sales.

Go Sport’s modest expansion moves in the late 1990s were to give way to a far more aggressive approach at the end of the decade, as the company vowed to begin expanding by as many as 20 to 30 new stores each year, starting with the 2001 year and targeting especially France’s mid-sized cities, long neglected by the group. Part of the company’s new expansion strategy was an increasing interest in international development. In 1999, the company moved into a new market when it opened three stores in Poland. Eastern Europe remained a target for the company’s growth, as Go Sport entered the Hungarian market with a store in Budapest. At the same time, the company announced its intention to step up its international expansion, suggesting that it would enter at least one new foreign market each year. Spain and Italy were identified as potential expansion targets.

Supporting the company’s growth was the opening of a new distribution facility in Valence in 2001. By then, Go Sport had been expanded in a new way when the company announced its intention to acquire its Rallye sister subsidiary Courir. Although analysts were somewhat skeptical about the promised synergies to be gained by the merger—since the Go Sport and Courir retail concepts differed greatly, not only in terms of merchandise but also in terms of the size of the stores—the merger boosted Go Sport, now renamed as Groupe Go Sport, to a solid place as France’s number two sporting goods specialist chain, with nearly 250 stores and nearly FFr 4.4 billion in annual sales.

The company nonetheless remained far behind the French market leader Decathlon, a fact that gave rise to speculation that the Go Sport-Courir merger might only be a prelude to a future spin-off of the Rallye’s French-based sporting goods wing. The merger of Promodes into Carrefour in 1998 created a new retail distribution heavyweight not only in France but on the international marketplace as well. In the race for survival in the quickly consolidating global retail landscape, Rallye and Auchan were tipped as likely merger partners—which in turn would necessitate a spin-off of Go Sport to avoid the creation of a Go Sport-Decathlon monopoly of the French sporting goods market. Both Rallye and Go Sport continued to deny any such plans as the new century got under way. While the French distribution market waited for the new wave of retail consolidation, Go Sport, now led by Charles Setboun, remained committed to its newly aggressive expansion plans.

Principal Subsidiaries

Go Sport S.A.; Courir S.A.; Go Sport Les Halles SNC; Club Sport Diffusion SA (Belgium); Go Sport International SAS; Les Buissieres SAS; Grand Large Sport SAS; Go Sport France SAS; Go Sport Diversification SAS; Go Sport Polska SP ZOO.

Principal Competitors

Athlete’s Foot Group Inc.; Decathlon S.A.; GIB S.A.; Intersport International Cooperation; Venator Group, Inc.

Key Dates:

1976:: Genty-Cathiard forms Société Alpine de Sport and launches sporting goods store Team 5.
1977:: Docks de France launches Go Sport.
1980:: First Go Sport store is opened in Belgium.
1983:: Genty-Cathiard acquires Go Sport and SEGMAS.
1984:: Merger of Société Alpine de Sport, SEGMAS, and Go Sport under Go Sport name.
1986:: Go Sport lists on Paris Bourse secondary market.
1987:: Company acquires FNAC Sport and Sparty; opens first store in the United States.
1988:: Company acquires SPAO.
1990:: Genty-Cathiard is acquired by Groupe Rallye.
1992:: Company sells off U.S. and Spain stores.
1995:: Central purchasing facility and new distribution facility opens.
1999:: Company enters Poland and, soon thereafter, Hungary.
2001:: Go Sport and Courir merge.