By Jessica Yun
French sports retailer Decathlon is overhauling its Australian strategy, dumping its big-box store approach and trialling a rapid rollout of several smaller urban outlets as it struggles to establish the scale and market share to be profitable in Australia.
Decathlon Australia chief executive Romain Gravigny said the business now had a better understanding of its customers after being in the local market for more than five years.
Decathlon Australia chief executive Romain Gravigny.
“Prior to me joining the business, we were focused on big-box retail only,” he said. “We’ve been able to adapt our business model to the Australian market, and it’s really, really different to Europe.
“We understood that the small format, not only in Australia, but worldwide, is definitely a trend. Customers are looking for convenience.”
Founded in 1976, Decathlon is the world’s largest sporting goods retailer, with more than 2000 stores in nearly 80 countries. It opened its first bricks-and-mortar store in Australia in the Sydney suburb of Tempe in 2017. It has been likened to “Aldi of sporting goods” because of its affordable private-label equipment, ranging from cycling gear to racquets to snorkelling masks, most of which is designed and developed in-house.
‘The love [European] customers have for Decathlon, I would really compare to the love Australians have for Bunnings.’
Decathlon Australia CEO Romain Gravigny
Decathlon has five big-box format stores in Sydney and Melbourne. It recently opened several new smaller-format stores in Sydney’s Manly, George Street, Town Hall and Chatswood, with plans to open another 10 across Sydney over the next 12 months.
The business experimented in early 2023 with a 45-square-metre pop-up at what is now the Town Hall location, which opened its doors last week. “This store became one of the biggest turnover per square metre in the company, not only in Australia, [but] worldwide,” said Gravigny.
“Sydney here is a very interesting laboratory,” he said. “Once this [market] is well-established, then we can roll out nationwide, of course.”
Despite Decathlon’s global reach, Gravigny acknowledged brand awareness in Australia was “increasing but not well-known”. The smaller-format stores are performing well so far, with sales beating forecasts by 20 per cent, according to Gravigny. He hopes the rollout will bring attention to Decathlon’s affordable prices and help endear the brand to locals.
“The love [European] customers have for Decathlon, I would really compare to the love Australians have for Bunnings,” he said. “The connection is really strong.”
The new, smaller-format strategy is a change from the approach of former Decathlon Australia CEO Olivier Robinet, pictured here in Sydney in 2017.Credit: Ben Rushton
The small-format approach represents a step change from that of the former CEO, Olivier Robinet, who launched Decathlon in Australia with plans to open 100 stores and a brought a focus on partnerships with brands and businesses.
The company’s Australian operations have never been profitable: it recorded losses of $24 million for 2023, deepening the losses from the year prior of $18.6 million, which was double that of the $9.3 million recorded the year before that. Revenue fell to $43.9 million in 2023 down from $51.4 million, according to its latest financial report filed to the corporate regulator.
“What you call loss is mostly a transformation cost,” said Gravigny. As a global group, revenue rose 1.2 per cent to €15.6 billion ($25.7 billion), with a 0.8 per cent lift in profits to €931 million ($1.5 billion). Decathlon was founded by French billionaire businessman Michel Leclercq, who owns 40 per cent of the business.
Decathlon’s biggest local competitors are Rebel Sport, BCF and Macpac, operated by Super Retail Group, which is embroiled in allegations of a toxic workplace, bullying and conflicts of interest. Despite the legal claims, Super Retail Group’s share price has risen after reporting better-than-expected sales since June and a 2 per cent revenue surge for fiscal 2024.
Decathlon has always ducked comparisons to Rebel, pointing out it sells a wider range of sports gear. Gravigny argued Decathlon was complementary, not a competitor, to Rebel, which has a key emphasis on fashion apparel and big brand names.
“Our strategies are really, really different; our focus is more affordability,” he said. “There’s different market positioning from our perspective. That’s how we play here, with our private label, with the best value for money.”
“To be even more affordable – that’s for us the most important topic; how can we make smart, innovative and sustainable sporting goods more affordable?”
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