In the 2019/2020 financial year, which ended in the first lockdown at the end of April 2020, sales fell significantly from 97 to 68.5 million euros and the number of employees fell from 877 to 654. After taxes, the company achieved a profit, but this also shrank from 1.2 million euros to around 240,000 euros.
The retailer now only has 22 branches in Austria that were once 50. Several competitors, including Intersport and XXL, have snapped up former Sport Direct locations. Sports Direct entered the Austrian market through the acquisition of the sports retail chains Sport Eybl and Experts.
Despite the poor development for years, the British sports retailer is sticking to its Austrian subsidiary and is constantly adding money. For example, the British have signed an unlimited bond with a total nominal amount of 30 million euros. In addition, an unconditional guarantee was given to cover the remaining negative equity of a maximum of 45 million euros and a subordination to all other current and future creditors with regard to the outstanding liabilities from the group credit line of around 40 million euros was declared.
“It is also confirmed that the current intention is to maintain the support of SPORTSDIRECT.COM Austria GmbH beyond April 30, 2022”, says the annual report. In addition, Sport Eybl Holding GmbH brought a claim of almost 35 million euros to Sportsdirect.com Austria GmbH in August 2020, “This contribution leads to an improvement in equity after the balance sheet date”, according to the company.
The company writes that further business development is difficult to predict due to the corona pandemic. After the first lockdown, however, sales developed “very positively” and in the first quarter of 2020/21 – adjusted for closures – were 11 percent above budget.
The fixed costs could have been reduced significantly through short-time working as well as rental and other operating cost reductions, and thus the effect on operational operations was curbed.
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