Fad for gadgets hits Rebel Sports

By PETER GRIFFIN

Retailer Briscoe Group is putting disappointing sales at its Rebel Sports stores down to competition from cheap consumer electronics but says it remains committed to its Rebel expansion plans.

Briscoe, which is listed on the NZX and runs 32 Briscoe homeware stores and 19 Rebel stores, saw sales drop about 3 per cent in the three months to October compared with the same period last year. Homeware sales were up 3 per cent on a "same-store basis", but sales of sporting goods dipped 14 per cent. Total sales came in at $71.6 million.

The strong dollar has made it cheaper to buy imported goods such as tennis rackets and running shoes but prices for high-value electronics such as flat-panel TVs and digital cameras have also plummeted and consumers are buying.

Briscoe chief executive Rod Duke said his discussions with sporting goods manufacturers such as New Balance and adidas had told him sports retailers were facing the same pressure worldwide.

"Everyone seems to think photo phones and digital cameras are soaking up demand where people would have bought Michael Jordan shoes," he said.

Duke thought the sporting goods market was cyclical and would come back.

"We're still putting Rebel Sports stores out there. You keep doing what you do but wind back inventory levels," said Duke, adding that it was up to the sporting goods makers to design more alluring products.

But Macquarie Equities analyst Warren Doak said sports retailers faced growing competition from "volume-driven" retailers that were increasingly selling cheaper sporting goods.

"It begs the question of the outlook for [Rebel Sports]. Is there a future for high-end branded sporting goods?"

The sales dip meant Briscoe failed to make up a $3 million profit shortfall from the first half of the year.

With 60 per cent of Briscoe's sales traditionally coming in the second half of the year, the retailer will be relying on a strong pre-Christmas selling season to make up lost ground.

Doak said that, while economic indicators suggested the economy was in good health, the retail sector was having an average year. "Retailers are finding for the last 12 months that the GDP figures do not reflect the underlying sentiment in the retail sector."

For Duke, some comfort can be taken from a change in the weather.

"Fortunately, summer has arrived," he said.

Briscoe's share price shed 3c to close last night at $1.37.

* New Zealand's largest retailer, The Warehouse, today releases its sales figures for the three months to October. The figures are likely to give some insight into the underlying health of the sector.