Greek retail Fourlis Group leaving Turkey

Turkey is out of the investment plan of the Fourlis group. In fact, if a strategic partner is not immediately found to co-invest in the activity of sporting goods stores, the Greek listed company will withdraw from the Turkish market, 12 years after its initial investment.

The revelation about the change in priorities was made by the group’s managing director, Apostolos Petalas, in the teleconference to inform analysts following the announcement of Fourlis’ financial figures for the nine months of 2022.

“The group will not continue to invest alone in the Turkish market,” said the CEO, noting that the goal is to develop the remaining markets where Fourlis operates, namely Greece, Cyprus, Romania and Bulgaria.

Having already closed 12 stores in the previous two years, the group currently has 12 Intersport stores and 3 The Athletes Foot stores in Turkey, with the activity showing a positive EBIT for the first time.

In the event that the negotiations do not succeed, the group will proceed with the divestment of the Turkish company, which in any case does not have a significant footprint on its turnover.

It is recalled that the Fourlis group has been present in the Turkish market since February 2011 when it acquired the franchise rights and the establishment of Intersport stores.

The first two Holland & Barrett in January

Regarding the development plans of the group, despite a delay of 4-5 months, the Holland & Barrett chain is expected to premiere in January 2023 with the operation of two physical stores simultaneously with the online store.

The delay, according to Mr. Petalas, is due on the one hand to bureaucracy (approvals had to be obtained for each code separately) and on the other hand to some problems in the supply chain, which were eventually resolved.

In total, in 2023, 6 stores of the British company of nutritional supplements and health and wellness products will be opened, while the entrance to the Romanian market will also be prepared.

The development of Holland & Barrett is the third pillar of retail activity for the group, after IKEA and Intersport. The sales target has been set at 50 million euros with a horizon of 2025, with an EBIT margin of 8%.

The British chain of health and food products, Holland & Barrett, was founded in 1870 and its network exceeds 1,600 stores in 18 countries around the world.

Three challenges

Analyzing the group’s results in the 9th month, Mr Petalas referred to the three challenges facing Fourlis: high inflation and its impact on consumer incomes but also on the cost of rents for the listed company, supply chain problems and availability products – mainly in the home equipment and furniture sector – and energy costs in its operating costs.

Stock shortages in IKEA stores remain significant but the situation is gradually improving, with the chain regaining lost market shares.

As Mr. Petalas said, IKEA lost share in 2020-21, but not because of competition. Large stores were more affected by the restrictive measures to contain the pandemic than smaller stores.

At the same time, however, IKEA gains in competitiveness, as the prices increased less compared to the 30% and 40% price increases made by other “players”. “That’s how we became more competitive and we’re taking back the market share” noted Mr. Petalas.

IKEA’s cost of sales rose 20% due to inflation, with energy costs rising 60%, while rents rose 5%.

However, October and November “run” with even greater growth rates and are boosted by tourism.

Unlike the furniture industry, the sporting goods industry has no problems with product availability.