Holdsport (HSP) – SA Sports and Outdoor Goods Market

In light of the recent offer by Long4Life to acquire Holdsport, we provide a detailed review of the SA sporting and outdoor goods market. Our pricing analysis shows that Holdsport and its competitors in the premium space cannot compete on price with the value retailers. Our geographical analysis of store footprint also highlights the under-representation of HSP stores in lower LSM provinces. While the French retailer Decathlon only has one store in SA, we believe a rapid expansion of its store base could have a similar impact that Cotton On has had in clothing segment. We also think that there may be opportunities for HSP to grow in the specialist cycling segment, while we provide an estimate of the impact of private schooling on the sporting goods category.