May 9, 2011 (Toronto, ON) – Canadian Tire Corporation, Limited (CTC.A-T) has now struck a deal to acquire Forzani Group (FTL-T), Canada’s largest sporting goods retailer. The friendly deal is worth some $770 million and will put Forzani, with more than 500 stores and some $1.4-billion in sales a year – and such chains such as Sport Chek and Sports Experts – under Canadian Tire control reports The Globe and Mail.
Analysts see the acquisition as a defensive move by Canadian Tire to combat Wal-Mart Canada Corp and to make the domestic market less attractive before another U.S.-based retailer, Target, moves into the Canada. But the move will also establish Canadian Tire as ‘the retail authority for sporting goods and apparel in Canada’ according to chief executive officer Stephen Wetmore.
Sport Chek and Sports Experts shoppers are seen as 18-to-35 year olds and not a demographic who generally shop at Canadian Tire. Wetmore also claims that there is little overlap in the product lines between Canadian Tire and Forzani’s stores, 70 per cent of whose sales are apparel and footwear. But one area where there is overlap is in the sale of bicycles and bike accessories. Canadian Tire already carries SuperCycle, its own brand of bicycles.
Read more here.