Sports Direct’s entry into Australia, New Zealand | Australian Markets
British sporting items giant Sports Direct’s entry into Australia is set to disrupt the nation’s $5 billion fitness retail market and can come on the expense of incumbent Rebel, in line with a main analyst.
Announced final month, the tie-up between London-listed Frasers Group and footwear retailer Accent Group will see the initial roll-out of at the least 50 Sports Direct shops in Australia and New Zealand over the subsequent six years.
Morgan Stanley analysts on Wednesday stated Sports Direct may succeed regionally, given its mother or father company Frasers and Accent have already got differentiated entry to international manufacturers like Nike, Adidas and Skechers.
As a consequence, they anticipate about 25 per cent of Sports Direct gross sales to come back on the expense of Super Retail Group’s Rebel.
While the earnings affect was doubtless insignificant throughout the 2025 and 2026 financial years, Morgan Stanley sees a draw back risk to consensus earnings within the 2027 to 2029 financial years as Sports Direct begins to scale.
They stated the Sports Direct buyer proposition would largely be on par with Rebel, albeit with a larger concentrate on non-public label.
“(Super Retail Group’s) risk profile had increased as they face greater competition in their two largest divisions, Rebel and Bunnings,” Morgan Stanley stated in a word to shoppers.
“This comes at a time when margins across the group are under pressure given the challenging operating environment.”
Anthony Heraghty, chief govt of Super Retail Group – which additionally owns Super Cheap Auto and BCF – instructed analysts earlier this 12 months he was not intimated by a larger push from {hardware} giant Bunnings into the automotive sector.
The push follows the success of Bunnings’ transfer into pet items and cleansing merchandise.
Morgan Stanley has additionally revised its price targets for Super Retail Group from $13.47 to $12.20 pushed by elevated competitors and earnings downgrades, and Accent from $2.70 to $2.50 given near-term incomes dilution.
Shares in Super Retail Group closed up 1.1 per cent to $13.40 and Accent up 2.7 per cent to $1.90 on Wednesday.
Frasers is one of the world’s largest retailers of sports activities, premium and luxurious manufacturers with more than 1500 shops in over 30 nations.
In the 2024 financial 12 months, Frasers reported a income of £5.5b ($11.4b), with its UK Sports section producing £2.9b in income throughout over 800 shops.
Accent has more than 900 shops — together with The Athlete’s Foot, Platypus, Hype DC and Nude Lucy — in Australia and New Zealand.
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