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The Warehouse muscles in on sports industry

Pseudonym

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Pseudonym Veteran member

Pseudonym

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The other day I learnt that at the end of last year, Shotgun Supplements was bought out by The Warehouse.

I like to think I'm reasonably in touch with fitness industry news, but that one had passed me by completely. It explains a lot though... I'd noticed an increase in the amount of spam I get from them. Currently they're spamming everyone every day for 14 days to celebrate their 6th birthday (which is not even a particularly significant one). We're only at day 4, and the daily emails are already irritating me - I'd love to know how many unsubscribes this campaign gets them by the end.

But I digress. Back to the Red Shed, and its invasion of the fitness industry.

Yesterday I did a bit more digging, and here's what I found:

2013: The Warehouse Group purchases
Torpedo 7 (outdoor sports gear)
No 1 Fitness
Shotgun Supplements

2014: The Warehouse Group purchases R&R Sport

 

That looks to me like the movements of a company that's determined to carve out as big a section of the fitness/sports industry as it possibly can.

The implications are huge. In NZ's online supplements market, for instance, there are currently lots of little players all undercutting each other and trying to get a foothold, and one or two players who are much, much bigger. And The Warehouse has just taken out the biggest player of all.

One of the retailers I spoke to predicted that life was going to get really tough for the small players, because they don't get the volume discounts available to the big guys, and now they have even less leverage to negotiate.

What do you reckon? What does this mean for the industry? And what does this mean for you as the consumer?

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crazyfacials Veteran member

crazyfacials

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I could care less really, at the end of the day I don't have any loyalty to any supplement store in NZ (or the world for that matter) , I just want the best price for the product that I want, so I welcome it, I could see how this could affect those who are in the businesses, but I am not one.

 

As for No1Fitness, I have his the "pleasure" of buying a machine from them, to be honest if I had not bought it online and seen it for what it is, I wouldn't of spent a single cent on their items, it was my fault and I am not blaming anyone else, their machines are plastic made in china toys, they however have cheap good weight clips (something my gym seems to not like to purchase)  they do however sometimes have smoking hot chicks working there!

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Wookie Senior member

Wookie

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I've dealt multiple times with No 1 Fitness now.

Bought some weights, a couple of kettlebells, supplements, a trap bar and a bench.

I don't make endorsements easily.

They're outstanding. Plenty of good quality gear at great prices, and a showroom in Auckland where you can go see everything before you buy.

Welcome to the market, it's brutal. And businesses need to adapt constantly. Find niches. Offer amazing customer service. Do free delivery. Stock products that no one else carries.

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Flex Senior member

Flex

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The Warehouse group WHG bought into Torpedo7/1Day, it's torpedo7 that have now bought R&R, Shotgun and No1Fitness so they all operate out of the T7 hamiltron warehouse  now. The WHG have also bought out Pet.co.nz, plus a few other online odds and sods as part of their multichannel retail. They have massive buying power however not all wholesalers like to deal with them so they won't get all the brands that smaller independants can carry. Torpedo7 now has a fitness and supplement section which is essntially a duplicate of Shotgun, and you can go into your local warehouse and see Andy's mug on the Shotgun stands instore. There are other large companies also going around quietly buying up online stores and chain stores and doing much the same thinga sthe WHG, so it's not just the WHG that's going to be the dominent force.

There's always competitors in every industry and there's always ways of competiting even with monsters like the redsheds - I'm sure that the WHG and RebelSport will be pretty concerned that SportsDirect are setting up a an ecommerce channel in NZ and Australia as that's going to make things pretty interesting for the mainstream sports market.

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Cameron_R Senior member

Cameron_R

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why oh why would one of nz's fastest growing companies sell themselves out to the warehouse, when they were making huge profits divided among a small group of ten or so people?

Because running a company is hard work, whereas sipping a tequila on the beach in the Riviera Maya spending your share of the sale price is eeaaaasy

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Pseudonym Veteran member

Pseudonym

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The Warehouse group WHG bought into Torpedo7/1Day, it's torpedo7 that have now bought R&R, Shotgun and No1Fitness so they all operate out of the T7 hamiltron warehouse now.

Gotcha. So I presume the sale included Shotgun's house brand of supplements, as well as the retail business. Do you know if it also included any of Andy's other ventures? He's part of SportsFuel and behind Cobra Labs too, isn't he?

 

sipping a tequila on the beach in the Riviera Maya spending your share of the sale price is eeaaaasy

Knowing Andy, that's the last thing he'd be doing! He's the most utterly driven businessman I've ever met - and I say that with some admiration. If you've seen his hyperactive performance on the TV ads, that's not an act. It's pure Andy. :D

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Horsebolone New member

Horsebolone

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Times are definitely getting tougher for local retailers, especially with the online boogie man taking over. Guess it just means we'll see less and less privately owned stores and more company owned franchises. Interesting point about SportsDirect from Flex, wasn't aware that was happening. As it stands right now a $200rrp running shoe in NZ can be bought from a uk or us website for less than half that and that's shipping and all. If an NZ channel came through I'd imagine prices would drop even more and shipping would be even faster. Rebel would be fine as they sell a variety of sporting goods but pretty unfortunate for the specialised stores like Shoe Clinic, FrontRunner and The Athlete's Foot.

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Leeroid Veteran member

Leeroid

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Unfortunate (or not) side effect of globalization is that the small fish get snapped up by the big fish. While this may be good for consumers initially (more buying power, larger range, lower prices), it probably won't be a good thing in the long run as the market ends up being monopolised by one or two big players. Google and Apple are buying start up companies for megabucks, way more than what they're worth simply to eliminate potential threats. More often than not, the new technology doesn't even get used and gets thrown in the trash can once bought up. There would definitely be negative implications on innovation and even on the labour market as efficiency of scale means that there is less need for labour. Resulting in more money accumulating in the pockets of corporate executives who then game the tax system and end up paying less tax than most of us. Lol I sound like a socialist.

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Pseudonym Veteran member

Pseudonym

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Good argument, Leeroid. And I agree with you about the flow-on effects to innovation, etc. Although in this particular instance, would it make a difference? I'm not sure how necessary innovation is to the online supplement retailers. It seems like that's a fairly well-established business model now, so I don't know where the opportunity for innovation is. (But I suppose that's the point - if it was obvious, it wouldn't be innovative!)
 

I sound like a socialist.

There's an election coming up. Now's your chance, bro! :D

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Leeroid Veteran member

Leeroid

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One solution is if the smaller private supplement stores franchise themselves with extreme / mass nutrition. Because no way either company will sellout, atleast while moe's still in buisness.

why wouldnt they sell out?

Because Moe is a man of integrity and honour. He would never do anything to compromise that.

 

Inb4 I become IFBB pro

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Terrymundo Senior member

Terrymundo

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One solution is if the smaller private supplement stores franchise themselves with extreme / mass nutrition. Because no way either company will sellout, atleast while moe's still in buisness.

why wouldnt they sell out?

Because Moe is a man of integrity and honour. He would never do anything to compromise that.

 

Inb4 I become IFBB pro

won't happen bro, I've concluded to be a pro in NZIFBB you need to have at least one of the following:

  • have Mohammed or other simlar arabic name
  • big ass titties
  • cock sucking skills
  • have xtreme nutirition as your background on FB
  • lift occasionally 
  • tag every other NZIFBB competitor/supporter in every single fucking thing on FB till it drives everyone else fucking mad
  • big ass titties
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