The A.S. Adventure Group is reinforcing its leadership in the European outdoor retail market through the acquisition of McTrek, which expands the group to 256 stores in seven countries and allows it to move into the German market with a sizeable presence.
McTrek is a retailer with 39 stores and sales of €52 million last year, about 20 percent of them through an online store. It reportedly reached an operating profit of €4.7 million last year and is projecting a turnover of about €58 million this year.
Ulrich Dausien, a founder of Jack Wolfskin who established McTrek in 1995, is to remain in charge of the German operation and he has become a shareholder of the A.S. Adventure group. The group is owned at a majority by PAI Capital, a French private equity group.
The A.S. Adventure group reached sales of €513 million in 2016. With McTrek the group's turnover would have reached about €564.7 million for the full year. The two entities were already trading partners since McTrek has been selling Ayacucho, a private label developed by A.S. Adventure.
The acquisition of McTrek enables the A.S. Adventure group to rapidly become established in Europe's largest outdoor market, although the McTrek concept differs markedly from others in the group. The multinational retailer will compete more directly with Frilufts Retail Europe, the retail arm of Fenix Outdoor International, which comprises Naturkompaniet in Sweden and Partioaitta in Finland – as well as Globetrotter Ausrüstung in Germany, after an acquisition in several stages.
McTrek has built up its business in the last years with a mix of left-over ranges sold at discounted prices, products from international brands such as The North Face and Mammut, and its private label products. With a lean and efficient leadership, McTrek has moved gradually more upmarket and turned into a leading specialist outdoor retailer in Germany, and it has adjusted well to the demand for omni-channel retailing.
Frederic Hufkens, chief executive at the A.S. Adventure group, said that it would start by learning more about the business model that allowed McTrek to expand profitably in the last years. He said the German retail company would probably move toward larger stores with improved visual merchandising – a direction that McTrek has already started taking with its latest openings.
Hufkens said that the plans did not include any redundancies, since McTrek operates with a very lean structure, and the retailer intends to expand in Germany. He saw more synergies in purchasing and finance, and the potential integration of McTrek's online platform.
The plans formulated by Dausien call for about three to four openings per year, along with the development of the retailer's omni-channel capacity. But Hufkens said that this growth may be accelerated to about five openings per year and maybe more in the years to come.
McTrek will certainly take advantage of A.S. Adventure's retail acumen, but Dausien suggests that his four decades in the outdoor industry could serve the larger group as well. Another potential benefit for A.S. Adventure is the sourcing office established by McTrek's parent company in Hong Kong. Dausien has been buying in the Far East for many years and the office has been used for sourcing of McTrek's private label, Our Planet.
The A.S. Adventure group formally bought more than 95 percent of the shares in Yeah AG, the holding company for McTrek. The majority of the shares was previously owned by Dausien and Henner Loeffler, who held 46 percent each. Dausien stayed with Jack Wolfskin until 1994 and went on to establish McTrek. This retail business was merged in 2001 with Bicycles Räder, leading to the partnership with Loeffler.
Dausien said it was Loeffler's decision to sell that precipitated talks with interested parties for a large minority stake and eventually led to the sale to A.S. Adventure. He added that he could not have financed the expansion of McTrek as well as the acquisition of Loeffler's shares. Some other shares were in the hands of McTrek staff and some are still held by former shareholders of Bicycles Räder.
Dausien has become part of a management group that comprises Hufkens along with Greg Nieuwenhuys, who leads the group's British arm, Dominique Motte for A.S. Adventure and Pieter Saman for Bever, and the group's chief financial officer, Kris Horrevorst.
The A.S. Adventure group was operating in six countries at the end of the year, trading as A.S. Adventure in Belgium, Luxembourg and France, with Cotswold Outdoor, Snow & Rock, Runners Need and Cycle Surgery in the U.K. and Ireland, and with Bever in the Netherlands.
The turnover of €513 million for the A.S. Adventure Group last year compares with reported sales of €470 million in 2015, but that only included part of the year for Snow & Rock. The reported turnover was affected by the unfavorable exchange rate change of the British pound.
Comparable store sales were up in all countries, including the U.K. in constant currencies. They moved up by 3.1 percent for the A.S. Adventure banner in Belgium and Luxembourg. The A.S. Adventure concept ended the year with 46 stores in the two countries, after two openings in each country and one relocation that entailed a major enlargement in Belgium..
Comparable store sales climbed by 3.1 percent at Cotswold Outdoor and they jumped by 5.7 percent for Snow & Rock, owing to improved product ranges and visual merchandising. Cotswold Outdoor ended the year with 76 stores, compared with 74 outlets the previous year. Outdoor & Cycle Concepts, the A.S. Adventure group's British arm, further comprised 45 stores trading as Snow & Rock, Runners Need and Cycle Surgery..
But the strongest performance again came from Bever, which reaped the benefits of its improved store format and multi-channel strategy. The number of Dutch stores remained unchanged.
A.S. Adventure is continuing to expand in France, with the opening of a store near Paris in November, at the shopping mall of Carré Senart south of the French capital. The outdoor retailer already opened a second French store earlier this year, in a shopping mall in Cagnes-sur-Mer, in the south of the country. Hufkens said he would be disappointed to add fewer than three stores in France in 2018. As part of its strategy to invest substantially in France, the retailer then intends to open about three or four stores per year for the next few years. Hufkens was quoted as saying in L'Echo, a Belgian newspaper, that he estimated the potential of the French market at 50 A.S. Adventure stores.