Decathlon: Biggest Store in Spain, but Withdrawal from US Market

VILLENEUVE D’ASCQ, France – Last September,  Decathlon opened in Spain its largest store so far, but the company also announced that it will cease all activities in the USA. Europe’s biggest bike supplier is said to have sold over two million bicycles in 2005.

End of September Decathlon opened a 10,500 square meter mega-store in San Sebastian de Los Reyes near Madrid. The world’s second-largest sporting goods retailer is doing well in Spain, and the same goes for France and Italy. Decathlon successfully entered countries like Hungary, Poland, Russia and China. It is even said that the company is building a bike factory in Suzhou, China. However, the track record of the sporting goods retailer also shows some less pretty results. In particular in countries where price consciousness is lower, like in the US where Decathlon started in 1999 by the acquisition of a regional chain of 20 stores. Plans were made to expand to 200 outlets in the USA by 2009. However, in 2003 the number of stores was reduced to only four. Competition from local players caused the downturn as well as, according to the trade journal for the sporting goods sector, ‘Sporting Goods Intelligence’: “Decathlon was not able to implement its special low-cost merchandising concept in the country because US regulatory authorities refused to certify many of its private label products for distribution in the USA.” Decathlon’s withdrawal from the US market will be at the cost of about 240 employees. Decathlon currently operates 373 stores worldwide. In July, the company opened a megastore in Brussels bringing the total to 8 stores in Belgium and 2 in Holland. According to Sporting Goods Intelligence, Decathlon’s 2005 global revenues increased by 9.4% to € 3,741 million, with virtually all the growth taking place outside France, whose share of the total turnover declined to 62% from 70% in 2004. A turnaround has been achieved in Germany and the UK.
More on Decathlon at:http://www.bike-eu.com/news/article.asp?id=2016