SUPER Retail Group is ditching its Amart Sports brand.
The company will convert its network of 65 Amart Sports stores into Rebel stores by the end of October, bringing the total to 157 outlets under the one banner.
The company said the decision came after a strategic review found there was considerable overlap in both customers and product lines between the two brands.
Amart Sports was founded in Queensland in 1976 and acquired by the listed retail group in 2011. Amart focuses more on value ranges and has a greater presence in regional areas with freestanding or strip locations, whereas Rebel outlets are more commonly in shopping centres. The consolidation will bring many of Amart’s product lines into Rebel.
The combined sports division reported revenue of $920 million and profit of $92 million in the 2017 financial year, an increase of 5.9 per cent and 5.7 per cent on the prior year, respectively.
“The Amart Sports brand has been and continues to be a strong performer for Super Retail Group, however, as a business it is important we are realising a strategy that places the group in the optimal position for strong and sustained growth,” Super Retail Group chief executive Peter Birtles said in a statement.
The conversion is expected to save the group around $15 million over two years, but will incur one-off costs of around $34 million. A spokeswoman for Super Retail Group said no Amart stores would close.
The moves comes as Super Retail attempts to shore up its sports division against competition from new market entrant Decathlon, the French giant dubbed the “Aldi of sportswear” for its focus on cheap, private-label ranges.
Earlier this year, Citi analyst Craig Woolford warned Super Retail could lose 4 per cent of its revenue and 7 per cent of its before-tax earnings within the decade, with price competition from Decathlon further eroding margins in the sector.
A price survey comparing Amart with Decathlon found Amart was often cheaper in sporting equipment, but Decathlon had much lower prices for private label apparel items.
Super Retail Group holds a 30.4 per cent share of Australia’s $2 billion fitness and athletic clothing stores industry, according to market research firm IBISWorld, with Athlete’s Foot parent company RCG Corporation holding 16.7 per cent.