Action’s turnover grew 28 % last year, to 3.4 billion euro. The chain has a more international presence, but its growth pace is below that of previous years, when growth exceeded 30 %.
Slower turnover growth
Discount store chain Action’s turnover growth comes solely on the back of new store openings, because a like-for-like comparison with stores that have been around for more than 12 months, only resulted in a 5 % turnover increase. That does make sense, considering the retailer opened 243 stores in seven European countries last year and will continue to grow rapidly. The chain now has about 1,100 stores and more than 40,000 employees.
It will add hundreds of stores again this year, even more than last year if everything goes well. The main focus will be France and Germany and in order to support its growth, it will also build four more distribution centers, doubling its current level.
Organic growth is also slowing down however: the 5 % like-for-like turnover increase was lower than a year ago, even though the chain emphasizes that it still outperforms the market. Operational profit grew a quarter compared to 2016, reaching 387 million euro. Operational margins, at 11.3 %, is somewhat lower than last year.
Action competes with Decathlon
CEO Sander van der Laan says he is happy with the results. The formula, which consists of a “broad, surprising and ever-changing product range”, is clearly popular. He also states that Action has become an international company, with about two thirds of its store network outside of the Netherlands. Remarkable is that French turnover surpassed Dutch turnover for the first time, even though the Netherlands still houses more stores.
The discount chain sees plenty of potential turnover in discount sports clothing and equipment and that is why it will compete with sports chain, selling cheap sporting shoes, yoga mats and fitness equipment from now on.