Galeria Karstadt Kaufhof has acquired multi-channel retailer SportScheck from the Otto Group. The Otto Group decided to sell its daughter company, because it feel this gives SportScheck the best possible chance to stay competitive in the long-term.
The Otto Group says it has considered all options very carefully, but that selling the company was the best choice. The Otto Group and Galeria Karstadt Kaufhof have signed an agreement, but the deal still needs to be approved by the German Federal Cartel Office.
Galeria Karstadt Kaufhof plans to integrate SportScheck into its omni-channel retail portfolio, which will poise them at the forefront of the retail sporting goods sector in Germany. SportScheck was part of Otto Group’s portfolio since 1991, but has had difficulties remaining profitable for several years.
17 Stationary Stores Plus Online
SportScheck GmbH Group is headquartered in Unterhaching, Germany, which is near Munich. It operates an online store as well as 17 physical stores across Germany. But with the fierce competition of pure online and hard-discount providers, the company has struggled to position itself successfully and for the long-term.
SportScheck Missed Investment Mark
Further investing in SportScheck would have contradicted the group’s focused growth strategy, the Otto Group explains. “This foresees targeted investment in market-relevant business models and Group companies that can be relied on to generate high growth and outstanding performance. In its current form it is clear that SportScheck does not fulfil these criteria.”
Sebastian Klauke, Member of the Otto Group Executive Board and Chairman of the SportScheck Supervisory Board, explains: “Very high investments would have been required to establish the fundamental prerequisites for bringing the company in its present form back into the black – with no guarantee that this would secure long-term success, given the extremely difficult market environment. Over recent months we have studied all possible options very intensively, considering both business and social aspects. In our opinion, the integration of the SportScheck ecosystem for the active and sporty lifestyle within the Galeria Karstadt Kaufhof omni-channel offer provides the company and its workforce with a far more reliable perspective of future viability.“