Decathlon UK has filed its accounts for 2024 with the business that runs the French company’s 45 UK stores and logistics ops seeing a year of “significant transformation”.
Decathlon
Turnover during the year (excluding VAT) fell by 8.4% to £260.6 million having fallen 5% in the previous year, and it was down 10.2% online. But disruption caused by a big programme of store upgrades and the launch of a new website explains much of that fall.
The gross margin excluding VAT also dipped to 38.3% from 38.7% reflecting what the company said was “a willingness to reposition decathlon on its price segment”.
Customer feedback had indicated that its pricing was perceived as relatively high and in the second half it introduced a pricing strategy aimed at improving value perception. Average selling prices were reduced and it said sales growth has been positively impacted since then. While it’s affecting the margin rate, it added that “a positive price elasticity on quantity is overall compensating the margin in volume”.
And while it faced margin pressures due to cautious consumer spending across the industry, its margin performance stabilised in the second half of the year and it’s expecting volume-led growth going forward.
The operating loss widened to just under £16.7 million from £7.1 million and the pre-tax loss grew to £23.7 million from £11.9 million. The total loss for the year on a net basis was also £23.7 million after a loss of £12.4 million in the previous year.
As mentioned, the year involved heavy investment. It had allocated £8.4 million in capital expenditure towards the modernisation of 15 flagship stores with newly designed locations focusing on “three key conquest sports”, road cycling, running and football. It also spent money on the new digital platform.
The temporary business disruptions were “tangible” and led to a 14% turnover fall year on year in the first half. But in the second half turnover was down only 1% year on year, despite the ongoing fragile consumer backdrop. And it said the upward trajectory has continued into the first quarter of 2025 with “robust” 14% turnover growth across all sales channels.
That came as customer numbers fell to 7.57 million from 8.29 million and the number of stores was reduced by one. But it’s increased its number of employees by 71 and the company said its ‘pleasure at work’ rating increased from 90% to 92%.
As mentioned, it was a year of transformation in the UK business and it undertook a comprehensive reconfiguration of its concept while also launching a redesigned e-commerce platform. It said that was a necessary step despite causing the short-term operational disruption that contributed to the decline in total turnover.
But performance was also affected by the challenging external environment and in the face of inflation and high interest rates, consumer sentiment remained fragile. That led to discretionary categories including sporting goods seeing softer demand and overall retail footfall continuing to decline for a second consecutive year.
That affected the company in the first half particularly but it said that from August onwards it recorded a “gradual and consistent recovery, especially in the digital channel, where performance stabilised and improved”. While the full-year results reflect the short-term impact of its transformation efforts, it said the underlying trend in the latter part of the year “signals renewed momentum” and the changes implemented “have laid a solid foundation for sustainable growth in 2025 and beyond”.
