exercise products Sport-Tiedje Muscles Up in Europe

The home fitness equipment retailer is expanding from northern Germany to a European-wide and online sales network — soon to include space in Karstadt sports stores.
Fitness fever has proved favorable for Tiedje, a sporting equipment company.

It all started when Christian Grau got his front teeth knocked out playing basketball in October 1999.

He was injured so badly he couldn’t help out anymore in sales at Sport-Tiedje, the home fitness equipment company based in Schleswig, Germany. Instead, the IT student was banished to a computer in a back room by then-owner Ulrich Tiedje, a cousin of his mother.

What came from his banishment went online just two months later — a web shopping site for Sport-Tiedje treadmills, rowing machines and strength-training stations.

Today Sport-Tiedje is a success story in multichannel retailing – so successful that starting in November, the northern German retailer will begin renting space at 21 Karstadt Sports stores as an external partner.

“We’ll do everything there – advise customers, make sales and deliver equipment,” Mr. Grau told Handelsblatt.

Mr. Grau, now 40 and sole owner of Sport-Tiedje, is a figure to be reckoned with in European sports equipment retailing.

The company, which previously operated 44 of its own stores in Germany, Austria, Switzerland, Great Britain and the Netherlands, will expand its network to 65 branches. The contract with Karstadt will initially run for three years, with an option to extend it.

Mr. Grau, now 40 and the sole owner of Sport-Tiedje, is a figure to be reckoned with in European sports equipment retailing.

The entrepreneur makes use of his double advantage: He occupied the sports equipment niche on the internet early on and rapidly built up a network of stores. The branch stores offer logistics for advising consumers on fitness equipment in person, which classic online shops like Amazon can’t do.

Even established sports retailers like Sport-Scheck are withdrawing from this complex category. And HBC, the new owner of Kaufhof department stores, plans to close that chain’s sports equipment sections.

That will leave Sport-Tiedje, with its fitness equipment in Karstadt stores, with almost exclusive access to walk-in customers in downtown areas. It will also be able to refer customers immediately to its larger, independent stores and web shop.

Mr. Grau praised his new partners at Karstadt Sports for acting like a quick-paced mid-sized firm. “They have short decision-making processes and want to push forward,” he said.

Signa, Karstadt’s parent company from Austria, split the sports equipment stores from the deficit-making department store chain in 2011 and made them independent.

“We’ve been in contact for several years,” said Mr. Grau. “Now the time is ripe for combining our strengths.”

A manager at Karstadt Sports confirmed the collaboration, which has not been officially announced. He expects that Sport-Tiedje will draw new customers in the important fitness category and offer services that were previously unavailable at its stores.

Mr. Grau intends to finance this expansion, like previous ones, on his own.

The company is doing well. According to the Federal Bulletin, in 2015 it had nearly €98 million, or $110 million, in sales and almost €5.5 million in pre-tax profits.

Mr. Grau estimates that in 2016, sales could increase to €100 million to €110 million, depending on the exchange rate for the pound.

“We don’t have any external investors on board but are contented customers of a local savings bank, with Commerzbank as our second bank,” he said. “That makes everyday life quite relaxed for us.”

Sport-Tiedje is the largest online retailer for fitness equipment, said Lars Hofacker of EHI retail consultants.

In EHI’s ranking of Germany’s largest e-commerce providers, Sport-Tiedje is up among other specialized sports shops, such as Fahrrad XXL and Rose Sports, but significantly behind retailers with more extensive offerings, such as Sport-Scheck from the Otto Group.

Online sales grow more slowly at Sport-Tiedje than with rivals that have pumped themselves up with investors' money, said Mr. Hofacker.

Sport-Tiedje has kept its headquarters in the small town of Schleswig on an inlet of the Baltic sea. The building is a peculiar mixture of branch store and open-plan office — only a partial wall separates 65 phone workers from a presentation space for fitness equipment.

Employees include native-language speakers in Spanish, Danish, Czech, Italian and Swedish. Mr. Grau operates 24 web shops in 12 languages.

Last year he made two foreign purchases — Ozi-Sports with four stores and web shops in Benelux, and Powerhouse Fitness from Glasgow, with nine stores in Great Britain.

 

For Mr. Grau, sport matters.

 

In recent years, Mr. Grau has assembled an experienced team in Schleswig. His co-chief executive is a former manager from Celesio. The future head of sales, up to now director for the Asia-Pacific region at Kettler, will soon move from Shanghai to Schleswig.

Even now, the Sport-Tiedje chief and father of two is motivated by more than just commercial considerations.

“It’s a great feeling to notice during exercise that your body is alive and how good movement is for it,” said Mr. Grau. “Many of our customers have lost that feeling by sitting so long at a desk or in a car.”

In order to get customers in touch with that feeling, he uses unconventional methods. For example, at the beginning of the year – a time of new resolutions – he promises customers a 1 percent discount for each kilogram lost.

And he always hands his deliverers a stack of brochures to put in mailboxes in the neighborhood. That way, he said, when a new customer tells his neighbors about his new fitness equipment, “they already have, as if by chance, our catalog.”

 

Christoph Kapalschinski covers consumer goods, textiles and food for Handelsblatt. To contact the author: [email protected]