7HURM009W Managers and Organisations

7HURM009W

Managers and Organisations 

Sports Direct Case Study 

Sports Direct at a glance

Founded as a single store in 1982, Sports Direct International plc is today the UK’s largest sporting goods retailer by revenue. The Group operates a diversified portfolio of sports, fitness, fashion and lifestyle [outlet]s in over 20 countries.

We have approx. 26,500 staff across five business segments: UK Sports Retail, European Sports Retail, Premium Lifestyle, Rest of World Retail, and Wholesale & Licensing (formerly Brands).

Our business strategy is to invest in our people, our business, and our key third party brand partners, in order to elevate our retail proposition across all our channels to attain new levels of excellence.

Business Model

Our business model is focused on delivering an unrivalled range, availability and quality of products – both third party brand and Group branded products. This includes different customer value propositions across our Sports Retail and Premium Lifestyle [outlet]s. To this end, we are elevating across all channels to enhance the customer journey at every step of the way. The Group`s business model is explained in greater detail below. This includes an outline of our [outlets] and retail channels, our elevation strategy including the management of our property portfolio, our people, our third party brand partners and our centralised support functions and Group brands.

In UK Sports Retail, we offer a complete range of sporting apparel, footwear and equipment through our predominant [outlet], SPORTSDIRECT.COM. This segment includes our lifestyle [outlet] USC. Our current forward-looking view is that the majority of our offering to customers must include leading third party brands. The elevation of our sports retail proposition is key to ensure we are fully aligned with the future directions and ambitions of these brand partners. The UK Sports Retail segment also includes our fitness division, which currently consists of 31 gyms.

In European Sports Retail, we are evolving our customer proposition in line with the elevation strategy, while also seeking to increasingly tailor our proposition to the local markets where we operate. These include the Republic of Ireland and continental Europe.

In Rest of World Retail, at the beginning of FY18 we acquired 49 stores trading as Bob`s Stores and Eastern Mountain Sports. We also have 30 stores trading as SPORTSDIRECT.COM in Malaysia.

In Premium Lifestyle, we are developing the Group`s premium offering, which primarily consists of the Flannels [outlet], along with Cruise and van Mildert. We aim to offer fashion-conscious consumers a luxurious, multi-brand retail destination with high-end and on-trend products. This is a core component of the elevation strategy and includes the provision of a new flagship Flannels store on Oxford Street in London which is anticipated to open in 2019.

In Wholesale & Licensing, the Group retains a portfolio of world famous heritage brands, which we offer via our [outlets], and also wholesale and license to partners internationally. Our own brands include Karrimor, Slazenger and Everlast. The Group is also proud to have a number of sporting and entertainment personalities as ambassadors, as well as supporting sporting events and venues.

MULTI-CHANNEL ELEVATION STRATEGY

Our elevation strategy continues to work towards improving our offering to customers across all of our channels, including marketing, social media, product, digital and in-store. This aims to enable the Company, along with our third party brand partners, to connect with customers via a consistent voice across multiple platforms, including online, mobile, and on the high street.

A NEW GENERATION OF STORES

Our elevated stores typically include exceptional visual merchandising and are led by third party branded areas. This new generation of stores includes regional flagship megastores, which are typically larger format stores in strategic retail locations. These can be situated on the high street in prime retail shopping areas, or in out of town shopping destinations. Flagship megastores typically include an extensive sports-category offering, and may have more than one [outlet]on the same site, including adjacent Premium Lifestyle stores and / or a branded fitness gym. The creation of these retail destinations enhances appeal to customers and generates operating synergies.

OUR PEOPLE

 It is the Group`s policy to treat all our people with dignity and respect. The Sports Direct family consists of approx. 26,500 staff, who work together across all areas of the business. We are proud that Sports Direct International plc is one of the first public companies in the UK to introduce an elected Workers` Representative who attends meetings of the Board (see details below). Remuneration & Rewards Our policy is to foster a reward-based culture that enables our staff to share in the success of the Group. During FY18, our share bonus scheme vested approx. 11.6 million shares worth approx. £45.5 million, which were shared by approx. 2,000 eligible participating employees as the final tranche of a scheme that was launched in 2011. It is Company policy to pay above the statutory National Minimum Wage, including rates that are above the statutory National Living Wage for those over 25 years of age in the UK. In addition to this, the Company pays awards and incentives of approx. £20 million annually, from which both permanent and casual staff can benefit.

WORKERS` REPRESENTATIVE 

Sports Direct is proud to be one of the first UK public companies to have en elected Workers` Representative that attends meetings of  The Board. The Workers’ Representative is Alex Balacki, a Store Manager who originally joined the Company 14 years ago as a Casual Sales Assistant. The Workers` Representative is free to speak on behalf of the Group`s workforce at all scheduled meetings of the Board in order to facilitate a healthy and constructive dialogue. Alex also attends regular meetings with senior management, and he is involved in a number of important projects (please see our Annual Report 2018).

OUR THIRD PARTY BRAND PARTNERS

We work with our leading third party global brand partners and provide significant prominence for these specialists with our customers across all our platforms. Our third party and Group brands are managed by central brand and marketing teams. This centralised structure significantly benefits the Group by enabling the individual brands to participate in Group buying and sourcing; aggregated supplier relationships and enhanced supply chain disciplines; Group stock monitoring and replenishment; and more inspired and harmonious visual merchandising in-store.