A new European outdoor retail alliance is shaping up with the acquisition of a 20 percent stake in Globetrotter Ausrüstung, the big German specialty outdoor retailer, by Fenix Outdoor, the Swedish company that owns the Naturkompaniet chain in Sweden and Parioiatta in Finland. For its part, Globetrotter holds a 25 percent stake in Transa, the biggest outdoor retailer in Switzerland.

Transa has eight retail stores and a web shop in Switzerland, while Naturkompaniet has 31 stores and a web shop in Sweden. Partioaitta Oy, which was bought by Fenix Outdoor in May 2011, has 14 store locations and a web shop in Finland.

Together, these four chains have a combined annual turnover of nearly €350 million, with Globetrotter taking the lion's share at around €250 million. The move comes after the recent pullout of Globetrotter from Euro Family, the informal buying group that it had formed with a couple of sporting goods retailers in Germany plus Sportler and Sport Alliance in Italy and Gigasport in Austria (see Outdoor Industry Compass no. 6-3+4 of Feb. 21, 2013).

As we subsequently reported, Globetrotter has been working on developing its own private label program to replace Euro Family's Meru and Kaikkialla labels, which represented between 15 and 20 percent of its sales (Outdoor Industry Compass no. 6-13 of July 13, 2013). Globetrotter's management has also been trying to negotiate better purchasing terms with major brands.

Statements by Fenix and Globetrotter and their management indicate that the two companies are looking at potential synergies in purchasing as well as information technology and other back-office operations. Andreas Bartmann, managing partner of Globetrotter, told us that there were no plans to grant privileges to Fenix' brands in its eight big stores in major German cities or in its online shop.

Besides its ownership of Naturkompaniet and Partioaitta, Fenix is also the owner of Fjällräven, Hanwag, Primus, Brunton and Tierra Products. It is a profitable public company trading on the stock exchange.

The transaction between Fenix and Globetrotter is due to close by Feb. 28. It will involve an equity increase, but the financial conditions for the investment could not be learnt. Reports indicate that Globetrotter welcomed the deal to boost its rather shaky financial position instead of seeking out a new loan.

Weakened by heavy investments in IT and in new stores, Globetrotter just about broke even in the financial year ended in February 2013 on flat revenues, with a major decline in the online business. The situation has apparently persisted during the current financial year.

Bartmann admitted that Globetrotter has been under financial pressure lately, but he pointed that that other sporting goods retailers in Germany had been suffering lately. As reported in SGI Europe, one of them, Fink Schuhe + Sport, filed for insolvency a few weeks ago because it was unable to negotiate the terms for an extension of its credit lines with its bankers.