Decathlon Group - sports major in UK
"Decathlon UK comes under Oxylane Group which embarks into designing, manufacturing and retailing of sports goods and accessories. Its product portfolio includes mountaineering equipment, bikes, sleeping bags, tents, clothing, footwear, electronic gadgets, and sunglasses among others. Decathlon UK offers private label brands, such as Quechua, Tribord, Oxelo, Caperlan, Solognac, and Artengo. The company sells its merchandise through wholly owned retail stores and websites. Decathlon maintains 9 stores in UK mainly in larger cities with a workforce of 220 personnel. It earned revenues of 330 million in 2009-10 with a decline of 3.5% compared to previous financial year.
The UK apparel, accessories & luxury goods market had total revenues of 240 million in 2010, representing a compound annual growth rate (CAGR) of 2.7% for the period spanning 2006-2010. The European and Asia-Pacific markets grew with CAGRs of 1.5% and 4% respectively, over the same period, to reach respective values of $487.3 billion and $393.1 billion in 2010. The women's wear segment was the markets most lucrative in 2010, with total revenues of 83 billion, equivalent to 41.9% of the market's overall value. The menswear segment contributed revenues of $45 billion in 2010, equating to 25.7% of the market's aggregate value. The performance of the Decathlon is forecast to accelerate, with an anticipated CAGR of 3.3% for the five-year period 2010-2015, which is expected to drive the market to a value of $320 million by the end of 2015.
Key factors affecting Decathlon in the UK apparel market include overall economic activity, trends in total population growth and the level of consumer spending. The UK apparel industry is less cyclical than the overall economy because clothing is an essential item. However, in a recessionary climate, consumers are less likely to purchase higher-priced items, and instead turn to similar merchandise available at lower prices. Demographic trends represent an important factor influencing apparel demand because population growth adds to the potential customer base for these products.
Today, the Decathlon Group has embarked on an upstream four vertical expansion without seeking to enhance the attractiveness of its sales outlets. Consumers in the 15-24 year old bracket have a high level of interest in fashion and regularly alter the style of clothing they wear alongside changing trends. Perhaps the most important factor affecting the Decathlon's market is competition from low-cost overseas suppliers, which influence product prices and domestic shipments."