The leading Austrian shoe retailing group reports that it has signed a contract to take over what has remained of Stiefelkönig from Bawag, the Austrian bank that took over the loss-making shoe retailing group in 2003, when it had a total of 170 stores. The chain presently consists of only 66 stores with 645 employees, which had a turnover of €83.8 million in 2010. Fifty-four of the stores are in Austria, and the others in Slovenia and Croatia.
After the closing of the contract, which is expected to take place in the autumn, Leder & Schuh plans to reposition Stiefelkönig in a higher segment of the market than before, complementing Humanic and its own other retail banners.
Leder & Schuh, whose 350 stores in 11 countries generated sales of €542.8 million last year, says it will try to secure as many stores and as many employees of Stiefelkönig as possible. However, it will try to sell some stores that will not be fit for the upgrading to some of the members of Ringschuh, an Austrian buying group that had expressed interest in the acquisition.
Company officials declined to comment on the terms of the acquisition contract, on future synergies with Leder & Schuh's operations and on possible changes of management. Notably, it could not be determined whether an anti-trust challenge may bloc the sale.
Back in 2008, Stiefelkönig was the second-largest shoe retailer in Austria, with a share of 17 percent including numerous stores trading under the Delka and Turbo banner, but its share has been dwindling. It was reported to have fallen in third place after Deichmann in 2009.
The diverse assets of Stiefelkönig group have been up for sale for at least three years. The European Commission has been prodding Bawag to sell them off after complaining about indirect subsidies of €550 million that it had been getting from the Austrian government to cover its continued losses.
Reporting a net loss of €10.8 million on sales of €109.8 million for what remained of the Stiefelkönig group at the end of 2010, including Delka, Bawag said last May that it wanted to see it sold before the summer. Other potential investors including the Hamm-Reno group have been looking at the assets.
After its failure to find a buyer for the whole group, Bawag has been selling off the group's various chains, trading under different names. It started by divesting its low-priced Turbo shoe shops in Austria and Slovenia to various interests, including Deichmann. Earlier this year, it sold all its 20 Geox franchises to the Italian company by the same name. Most recently, Salamander Austria took over the group's Delka chain of 35 shoe shops.