Moresport finally bought

12 September, 2006 at 10:48 am | Posted in Companies | Leave a comment

Ethos Private Equity said yesterday it had bought Moresport, the owners of Sportsmans Warehouse, ending months of speculation as to who would buy the retailer after competition authorities blocked a previous deal.
In April the competition tribunal turned down an offer by Massmart Holdings to buy Moresport.

Moresport’s chief executive, Kevin Hodgson, said management wanted a stable medium- to long-term owner. “Having an investor who has one eye on selling is disruptive.”

Ethos’s partner, Shaun Zagnoev, said the normal investment horizon for a private equity deal of this nature was five to seven years. Ethos had valued privately held Moresport at R681 million. The remaining undisclosed stake is owned by Moresport management.

Zagnoev said Ethos had bought the company because of its “exceptional management talent” and because the sporting goods market was growing faster than other retail sectors. But while Moresport management looked for a buyer, Mr Price Group launched its own sports test, Mr Price Sport.

However, Mr Price expects more than half of its sales to come from sports clothing and leisurewear.

Zagnoev said that apart from providing stability to Moresport, Ethos could potentially provide additional capital for possible future expansion plans. Expansion plans would probably be organic, but acquisitions were a possibility, even though they were unlikely to be significant.


Hodgson said that two new Sportsmans Warehouse stores were due to open in the next quarter and that one more Outdoor Warehouse would be built. He said beyond that the company would start looking at smaller cities in which to expand.

Moresport had achieved sales growth for eight years and profit growth had outperformed sales growth. Hodgson did not provide figures, but as the company was privately owned he was not obliged to.

He said the planned quotas on imports of Chinese-made clothing would not hit Christmas sales because these orders had already been made. Beyond that, however, they would have an impact on availability and prices.

Vestacor, before it announced selling its stake in Moresport yesterday, bought another retail chain, Stuttafords, showing it had not tired of the sector. Vestacor said it aimed to turn Stuttafords around, including returning it to being one of the country’s leading sellers of up-market cosmetics.



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