French sports megastore may hit the sector for six

News Analysis: A new approach to sports retailing arrives in the UK

BRITAIN'S STRUGGLING sports retail sector is facing fresh competition after Decathlon, a privately owned French sports group, opened its first UK store yesterday.

Decathlon claims to be the world's third largest sports retailer, with 215 megastores, including 181 in France, and sales of pounds 1.2bn. It has chosen an obscure site in Surrey Quays in London's Docklands for its first UK outlet, which is spread across four separate buildings on a huge retail park. A further four or five UK shops are planned over the next three years, with the second, opening in the Midlands, expected to be announced in the next few weeks.

The aggressive move comes at an awkward time for Britain's sports retailers, which are already struggling against a combination of over-supply, weak demand and a lack of differentiation between the major chains. The slowdown has caused a slump in share prices over the past year, while a much-needed consolidation started last year, with JJB Sports taking over rival Sports Division.

None of this seems to worry Decathlon, which says its private status will enable it to take the long-term view. "It is not a crowded market for what we are doing," says Edward Roberts, Decathlon's UK spokesman. "We feel our format is completely different. There is a gap in the market for something with more sports equipment and with a higher level of in- store advice. We are not about sports fashion."

Decathlon's first store certainly looks different. The total selling space of 107,000 square feet is eight times the size of the average store of UK market leader JJB Sports. Half the space is devoted to equipment such as cricket bats, which rivals scarcely bother with.

The four buildings cover specific sports, with one devoted to team sports, and another devoted to water sports and other outdoor pursuits such as climbing. Sports which are almost ignored by most big sports shops, such as fishing, also feature.

As well as larger items of equipment such as canoes and saddles, the stores include test areas such as a climbing wall to test shoes and a tennis machine which fires balls at shoppers who want to test rackets. There are also maintenance sections, including a re-stringing service for tennis rackets and machines for re-edging skis.

The product range looks impressive, though Decathlon does not attempt to stock all the latest styles and colours. Anyone seeking the latest Adidas Predator football boots would be disappointed, and the choice of golf shoes includes only one example from the top-selling Footjoy brand.

"We have less stock than the largest JJB outlets, but then we will not battle with Nike or Adidas to get an exclusive styling and then have to stock umpteen different colours," says Mr Roberts. More than half of Decathlon's stock consists of own-brand ranges at aggressive prices. A football is pounds 5.99 for example. Plain coloured T-shirts are pounds 4.99. All Decathlon's bicycles are its own brand, with prices ranging from pounds 99 to over pounds 1,000.

However, it is debatable if UK consumers want own-brand sports clothing and equipment, however cheap. Criticism of the top UK sports retailers has centred not on the brands they stock but on the prices they charge. There are also complaints that the choice is limited to certain sports, and almost exclusively to clothing.

Mike Godliman of Verdict, the retail consultants, says lack of differentiation and innovation is another problem. "What seems to be happening is that the major players are trying to grow sales and profits simply by adding more stores. They are not very well differentiated so the risk is that people rely on discounting all the time. The opportunity in this market is to make the customer experience different."

There will be a significant development in this direction when Nike opens its Niketown store in London later this summer. The store will be a huge brand-building exercise for the Nike name and will place heavy emphasis on the tradition and history of sport in an entertaining format.

All this should provoke further improvements in this lacklustre sector. And yesterday's annual profit figures from JD Sports showed some of the major players are starting to make tentative steps in this direction. A largely fashion-led format with more than 50 per cent of its sales in footwear, JD Sports has been placing more emphasis on exclusive ranges from top names such as Adidas as well as more clothing brands such as Thomas Burberry and Fred Perry.

The benefits showed, with a 9.5 per cent increase in profits to pounds 9.8m, though same-store sales in current trading are only up 2 per cent.

One branch of Decathlon and one Niketown will not change this market. But if one of the new names can develop some ideas that capture the public's imagination, the country might start to see sports shops living up to the name rather than masquerading as fashion boutiques.