Decathlon UK invested £10 million in transformation projects last year, but still ended up losing £2 million.
The sports retailer had a 5 per cent decline in revenue over the course of the year, and comparable store sales fell by 2.5 per cent, but the group maintained that its performance was in line with expectations. The sales decline, nevertheless, follows years of robust sales growth, with increases of 25 per cent in 2021 and 6 per cent in the preceding year.
The retailer of sportswear attributed its poor performance to the high cost of living, market factors (including structural shifts in the sports business), and well-timed store closures (it closed six failing locations in the previous two years).
Decathlon acknowledged that it was negatively impacted by the retail industry’s conservative buying practices, a challenging economic climate, and erratic weather, which “adversely impacted” seasonal sports like skiing and “contributed to a 7 per cent decline in the overall UK cycle market.”
In spite of these obstacles, the retailer strengthened its resilience and spurred growth by increasing operational efficiency and making calculated investments. It updated its most important stores, automated warehouses, unveiled a new website, and expanded its circular business model by introducing buyback and rental programmes.
Over the course of the year, Decathlon expanded its wholesale business by working with Next, Argos, eBay, Asda, Debenhams, and Tesco. Moreover, it reduced inventory by £ 16 million by improving stock efficiency by 16 per cent.
Decathlon praised 2023 as a transformative year and reported higher sales across its entire business in April, but the UK loss still occurs.
Decathlon UK chief financial officer Franck Laden said, “Looking back at 2023, a year marked by significant challenges for the UK’s retail sector, particularly within key segments of the sports equipment industry, it’s evident that a combination of factors influenced our revenue growth negatively.”
