Foot Locker acquires Runners Point

The U.S. retailer has announced that it is buying Runners Point, the German athletic footwear and apparel chain, for €72 million. The majority of shares in Runners Point are held by Hannover Finanz, a German private equity investor, while the remaining shares are owned by the chain’s senior management led by Otto Hurler and Harald Wittig, who will remain on the company’s board. Currently, Runners Point runs more than 200 stores across the German-speaking countries and the Netherlands, partly through franchises. In addition, RP operates fashion-oriented shops under the Sidestep banner as well an online business run through a subsidiary, Tredex. In 2012, Runners Point had sales of €197 million. As of Feb. 2, Foot Locker runs 3,335 shops in 23 countries.

Comments: Runners Point finally changes hands – it has taken Hannover Finanz over a year to find a suitable buyer for the retail chain that it acquired back in 2005 from KarstadtQuelle, the German retail empire which is no longer. Foot Locker’s investment in Germany highlights the very competitive nature of the German market and shows that even potential buyers of a chain such as Runners Point have to think twice before they make the step. To succeed will take both financial backbone and expertise in the athletic footwear retail business – criteria that Foot Locker certainly meets. The change of ownership has taken quite a while and it is no surprise that the price Foot Locker is willing to pay remains on the low side – just over one third of annual sales is not exactly a major investment for a fast-growing chain like RP. Apparently, investors have become cautious not to burn too much money in a market which is big, but no longer growing at  double-digit pace. In Runners Point’s case, the German market may become even more competitive in the months and years to come as Intersport International decided to acquire The Athlete’s Foot last year – the globally operating network of franchised sports shops is positioned in a similar way to Runners Point. Although The Athelete’s Foot has not entered Germany yet, it certainly will, once its new owners are confident that they have shaped it in a way that enables it to survive in the highly competitive German market.

 

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