Sportsware and outdoor equipment retailer Holdsport – which trades through Sportsmans Warehouse and Outdoor Warehouse – is trading up a storm for its Cape Town-based Performance Brands (PB) clothing line.
PB is a multi-brand developer and wholesaler of technical apparel and equipment. Its portfolio includes the popular First Ascent and Capestorm brands and specialised cycling equipment by BBB. The company’s products are distributed nationally through independent outlets as well as Holdsport- owned stores. Holdsport indicated in its latest annual report that PB’s annual sales in the year to end February of R111m translated into a decent profit of R19m.
But the breakdown of the revenue line is intriguing because sales to external customers decreased by 1,5% from last year, but increased by a whopping 27% to Outdoor and Sportsmans Warehouse. The strong ‘internal’ sales meant a 12% in total sales – suggesting that with more than half of the sales still coming from Holdsport’s own stores some extra effort will be needed to boost the number of external customers.
Holdsport CEO Kevin Hodgson noted demand from the independent market was weak. “Strategically we anticipate the internal turnover contribution to continue to grow at a greater rate.”
He said that while the financial performance of PB was disappointing, much was achieved in bedding down the acquisition of Capestorm and preparing this division to design and produce a meaningful portion of the Sportsmans and Outdoor private label product.
Significantly PB expanded its warehouse space to 3,000m² by constructing an additional warehouse adjacent to its premises and moved into the new facility earlier this year. With Holdsport’s store expansion continuing this year PD is likely to see additional demand, without attracting any more external customers. Holdsport opened a new store in Sea Point, and plans to open a new Sportmans Warehouse store in George shortly.
But Hodgson admitted the outdoor market was not growing at the same rate as the sporting goods market – and added that there was a decrease in demand for ‘bigger ticket’ items. Nevertheless Holdsport opened a new store in Rondebosch - next door to the well known Sportsmans Warehouse outlet. This creates a precinct of almost 3,500m² of specialist sporting and outdoor retail – a node that on its own should help along PB’s sales in the current financial year.
Holdsport also opened its new warehouse facility in Philippi during the last financial year. Hodgson said this modern facility was 11,000m² in size and enabled the company to expand the distribution of locally sourced products in addition to the distribution of directly sourced.
By Jenni McCann