Sporting goods giants up the ante

The decision by Nike and Adidas to hold back certain ranges from discount retailers is putting pressure on those retailers to improve their presentation. The sporting goods giants fear that poor presentation of their brands in discount stores is diminishing the value of their brand. Discount sporting goods retailers like Sports World will suffer the consequences. "We're asking retailers to step up in terms of brand presentation and product presentation," Gil Steyaert, managing director for Adidas in the UK , told the FT. "They (Sports World) will look at (whether) they want to evolve their brand presentation to serve a higher part of the market." The new rules regarding presentation and customer service will come into effect in January.

For other sporting goods groups like JJB sports and JD Sports the new policies may work in their favour. JJB Sports is hoping to secure those product lines that will no longer be carried by Sports World. "Both Adidas and Nike have new distribution policies that have been in place for some weeks but will come into effect from 2007," said JJB chief executive Tom Knight. "There are certain presentational (requirements) in their policies...that would put them (Sports World) in a different category to us."

Sports World owner Mike Ashley has made his fortune by heavily discounting premium Nike and Adidas products, while also selling his own brands like Dunlop, Slazenger and Donnay. His tactics have created admirers and detractors in equal measures. His low-pricing measures have even resulted in some retailers telling suppliers they would stop stocking their brands if they also supplied Ashley's companies.

Ashley, who also owns Lilywhites, has recently taken a 29 percent stake in outdoor sporting group Blacks Leisure. Recent media reports have alleged that the billionaire plans to reverse the Sports World chain into Blacks Leisure Group plc. Ashley could not be reached for comment.