Global Capital Management LTD (Global), the alternative asset management arm of Global Investment House, announced today that GMFA Fund has reached an agreement to acquire a stake in Olgarlar A.S. (SPX, Olgarlar Group), the leading sporting clothes and equipment retailer in Turkey. Ozhun Olgar and Orkun Olgar who have been managing the business for the past ten years will continue to manage the operations in partnership with GMFA.
Established in 1989 as a sporting goods retail company, SPX currently operates in the Turkish sporting and lifestyle goods market with a focus on retailing and exclusive distribution of individual sports goods, lifestyle and outdoor brands. Retail channel of Olgarlar Group consists of 22 SPX stores (2 franchisee) offering products in multiple sport clothing and equipment categories, 6 Vault stores (4 franchisee) offering multi-brand footwear, 1 Quiksilver store in Turkey and an online shop. On the distribution front, the Company represents 30 international sporting good brands; including Salomon, Merrell, Quiksilver, Billabong, Babolat, Rossignol and Burton, on an exclusive basis and sells directly to third party stores. All in all, SPX's net sales showed CAGR of around 14% in USD terms between 2011 and 2014.
Total size of the sporting goods retail market is estimated to be around USD1.1billion and the market is expected to grow with a CAGR of 10% over the next 5 years. The growth is influenced by increasing income levels, increasing number of people engaged in sports activities due to greater attention to human health and favorable demographics.
The investment by GMFA will support SPX's growth plans, focused on further penetration in Turkey, introducing new brands, and entry into major European and Middle Eastern markets. Olgarlar Group projects to grow in the retail segment via opening SPX, Vault, Routefield (own casual clothing brand) and Quiksilver stores. Besides, as a distributor, Olgarlar targets to grow within its current brands organically and by adding the distribution rights of prominent global sports brands to its portfolio.
Commenting on the transaction Mr. Ozhun and Orkun Olgar stated that this new partnership is an important milestone for SPX: "We are pleased to have entered into a strategic partnership with Global Capital Management. This partnership will strengthen our market position and allow us to expand our business into new categories and channels. Our goal is to acquire the distributorship of other sports, extreme sports and lifestyle brands and cement our position in the rapidly growing market".
Mr. Sulaiman Al-Rubaie, Managing Partner at GCM commented, "Through different funds under management, this will be our fourth investment in Turkey after TAV Airports, Bicakcilar and Yargici. We are continuously increasing our allocation to Turkey, because we continue to believe in the fundamental macro story of Turkey and its importance in the region. With the addition of our strong experience in value creation, corporate structuring, international expansion and management by financial metrics; SPX will be very well positioned to expand both in retail via its store concepts and distribution segment. We are delighted to team up with the right business partner and management who we believe will successfully achieve the planned growth scheme."
Mr. Ihsan Sancay, Partner and head of Global's Turkish Private Equity Practices, stated, "GCML's investment focus is on growth companies. This investment gives us an excellent opportunity to back a unique business proposition to fulfill its growth aspirations and potential. We have been impressed by the solid financial and operational performance of SPX, talented and ambitious management behind this successful story. The sector is almost at the very beginning of its evolution and we believe SPX is well positioned to benefit from the inevitable growth in the business. We see very important operational and geographic expansion potential for the business and believed in the long term prospects in the sector, and are committed to working together with our ambitious and successful partners in SPX in growing the business and investing in its future."