2023-07-10 05:00:13
Entering a foreign country can be done the slow way of investment, marketing and store-to-store penetration, or the fast way, with a local partner with knowledge of the market and the customer, a solid base of consumers and years of experience in the country. This was the last route taken by JD Sports, first buying Sprinter and later creating a joint venture with Sonae. Now, like many others in the past, he has just taken 100% of his business in the country.
The British group began its offensive in Spain in 2011, when he took over 50.1% of Sprinter for 20 million euros. The founders, the Segarra and Bernad families, maintained a minority stake in the capital.
En 2017, a new leap forward came, with the creation of the Iberian Sports Retail Group (ISRG), a joint venture with the Portuguese company Sonae, which began to operate the Sprinter, Sport Zone, JD Sport and Size chains. As a result of this agreement, the Bernads left the capital. A year later, the company (50% controlled by JD Sports) bought the Sport Zone chain for 1.3 million pounds.
The operation values the ‘joint venture’ at around 0.7 times its turnover and 2.8 times its net result
From there, the joint venture It grew with purchases: in 2021 it took over 80% of Deporvillage for 140 million euros, and a year later raised its stake to 98% for a further 19.8 million euros. The founders of Deporvillage, Xavier Pladellorens and Àngel Corcuera, remain in the capital, although JD Sports maintains a purchase option.
Also in 2021, Isrg bought 50.1% of fitness equipment company Bodytone for £8.9m, with an additional payment of 3.1 million pounds agreed if certain conditions were met, and which was finally reduced to 2.9 million pounds. The purchase option on the remainder can be executed from 2024. In addition, that same year JD Sports transferred its business in the Netherlands, which includes the Aktiesports and Perry Sport chains, to the Spanish joint venture.
On Friday, the group announced what it had already anticipated in the past: that it had reached an agreement to buy Sonae’s stake and that held by the Segarra family in Isrg. for 500 million euros, valuing the company at around one billion euros.
The company includes, in addition to Deporvillage and Bodytone, a network of 203 Sprinter stores, 88 Sport Zone, seventy from Perry Sport in the Netherlands and 84 from JD Sports in the Spanish market. In the last financial year, he billed 1,152 million pounds, and earned 266.2 million euros, which means that the last operation values the joint venture around 0.7 times its turnover and 2.8 times its net result.
In the last financial year, Isrg had a turnover of 1,152 million pounds, and earned 266.2 million euros
Giants that took control
The JD Sports formula is unusual in the Spanish market: the most common among international operators has been either to grow with purchases (as ecommerce groups such as Veepee did, with the acquisition of Privalia) or through national distributors.
The most similar case is joint venture created this same year between Druni and Arenal, the latter owned by Sonae. He was also about to opt for this Lacoste model with the Basi group, although it was finally decided to maintain a license agreement.
The result has always been, whether years or decades have passed, the takeover by the foreign group. Among the historical cases are those of three luxury companies: Giorgi Armani, Burberry and Max Mara.
Experiences between sports fashion brands and their local distributors have often ended in court
Armani decided to take control of his business in Spain in 2009. That year, the led Italian group began negotiations with the Zunzunegui family, owner of the license to distribute the Giorgio Armani, Armani Collezioni, Emporio Armani, Armani Jeans and Armani Junior brands in Spain, which at that time had eleven stores in the country.
At the head of the Armani business in Spain was Amalia Zunzuneguiwho had introduced the brand in the country at the hands of her sisters, Begoña and Carmen, who had also distributed brands such as Cacharel or Fendi in the country.
The businessman Mario Malatesta was responsible for the introduction and development in Spain of Max Mara. For more than twenty-five years, this Italian businessman based in Barcelona held the reins of the Italian firm in the national market.
Armani, Burberrry, Hugo Boss or Max Mara are some of the firms that entered Spain with distributors
At the same time as Armani and Burberry, Max Mara’s parent company absorbed General Import, the company through which Francesco Malatesta operated with the brand. This movement, which involved the creation of a subsidiary by Max Mara, coincided with the retirement of Mario Malatesta.
The company Organización Gómez de Zamora (Ogoza) began its trajectory in 1962 distributing products from brands such as Kangol and Facis, and in 1987 it signed an agreement with Hugo Boss to manage the German firm in Spain. Ten years later, Hugo Boss created his own subsidiary and took control of the business. Years later, the story was replicated with Gant.
The most paradigmatic case was, however, that of Burberry. Historically, Burberry operated in Spain through a license to the Mora family., who ended up selling his company to the parent company in 2000. The strength of the Mora was such that Burberry came to have an exclusive brand for Spain, Thomas Burberry. In 2009, the group’s parent company made the decision to standardize its product throughout the world, so Thomas Burberry was suppressed.
The experiences in sports fashion give rise to another report, because almost all of them ended up in courtThis was the case with Nike and Cidesport and Puma and Estudio 2000, or Adidas and León de Cos Borbolla, which was not their partner in the country, but registered the brand before the Germans did. New Balance, for its part, acquired its partner in Spain, Alfico, now embroiled by breaking the contract with which it was its retail partner, Experience Store.
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