decathlon - the sports giant in india

India's love for Decathlon – part I
In a country notorious for its lethargy, how does a sports retailer jostle grocery or apparel sellers to the podium? Shopping spaces with a rare 'playground' feel and a shrewd product mix that encourages impulse purchases hold some clues.
Share Gift this article

Soumya Gupta
29 May 2018
 A DECATHLON STORE IN ULUBERIA, NEAR KOLKATA; RUDRA NARAYAN MITRA
"Very dangerous" isn't the way you'd want your customers to describe their experience with your business, unless you are a retailer. In which case, given just the right combination of factors, those words signify high praise.

“Before a family trip, we always go to Decathlon,” says 25-year-old Akanksha Srivastav, a Mumbai-based cinematographer. “Every time we enter a Decathlon, we end up spending at least INR15,000, which is why it is very dangerous for us to enter that store,” she chuckles.

Walk into any Decathlon store with its gigantic blue signage, and you’ll stumble into a chaos of children testing out bicycles or ping-pong tables, while their parents pick out backpacks and gear for the sports of their choice. It’s a pronounced break from the lethargic window shopping that’s a staple of shopping culture in our cities.

With its "Sport for all, All for Sport" slogan, Decathlon has fast, but without much fanfare, sparked a renaissance in sports, fitness, and family fun across urban India. That’s not just the holy trinity of metropolises — Delhi, Mumbai, Bengaluru. Decathlon stores are doing brisk business in smaller cities such as Ludhiana, Ranchi, and Mysuru.

Decathlon's headline number is eye-popping — INR917 crore in sales in FY17. That puts it ahead of several individual national retail chains selling daily-use grocery, apparel, or electronic accessories. For a specialty retailer barely eight years old in India, not known for its athletic culture, it’s a stunning record.

In both FY17 and FY16, Decathlon India's cost of raw materials consumed has remained zero. This could mean Decathlon's parent, the French giant Decathlon SA with latest reported revenues of over EUR10 billion, is manufacturing goods that Decathlon imports and sells. In fact, the India arm closed FY17 with INR27 crore more of inventory than it was able to sell. This number could indicate that Decathlon does not have trouble stocking up even if it is operating at a loss.

Parental support apart, how did Decathlon manage to crack open a difficult market? ET Prime spoke to customers, analysts, and sports-retailing business owners, and everyone had a different answer. (Decathlon India did not respond till the time of publishing. We will update this story with its comments, if any.)

But first, a primer on sports retailing in India. It’s a country where cricket is a religion and people stay up nights during the football World Cup, but lifestyle, income, and infrastructure constrictions mean people hardly play sports.

"We love watching sports,” says Aashutosh Chaudhari, co-founder and vice president of Sports365, an e-commerce platform for sports goods, equipment, apparel, and the works. “According to our back-of-the-envelope calculations, around 65% Indians follow a sport — a level similar to that in the US, Europe, and China. But only 1% of us actually participate in it."

In recent years, some of that inertia has melted. One factor responsible is the blitz of sporting events that have begun consolidating fan bases around them. Besides the blockbuster Indian Premier League, there is now the Indian Super League for football and the Pro Kabaddi League.

Add to these the rise of individual stars in non-cricketing sports. A leading example is badminton, where Saina Nehwal, PV Sindhu, and Srikanth Kidambi have become household names. In 2017, Sindhu was among the top celebrity endorsers in India.

Coinciding with these trends is a slow-burning shift in sports retail. Chaudhari of Sport365 set up his business in 2012 in an attempt to organise sports goods retailing without competing with the neighbourhood sports shop that sells badminton racquets with INR10 photocopies and school stationery.

By industry estimates, more than 50% of sports retail is still in the hands of mom-and-pop stores. But the business opportunity is big and spread in four general categories: sports goods (racquets, balls, etc.), sportswear, sports nutrition (supplements and drinks), and fitness equipment (treadmills, dumbbells).

"This is a very niche business, but in India it is worth USD8 billion-USD9 billion," says Chaudhari. "[The challenge is,] spending in Indian households is still very low, around USD50 per year per home. Compare that to USD200 in China and nearly USD800 in the US and Australia."

Enter, Decathlon. The company set up shop in India in 2009 as a cash-and-carry wholesaler, based out of warehouses in Bengaluru and Ghaziabad among others. It was not until 2013 that Decathlon finally got its retail licence and opened its doors to regular consumers. It is yet to turn a profit in India; however in FY17 its losses fell to almost a fourth of the previous year's, to INR52 crore.  Though there are competing explanations for Decathlon’s rise, certain business choices that determine success are the same for all kinds of retailers. Chief among them are the assortment (the mix and number of goods that a store has), pricing, location, and shopping experience.
 With its warehouse-like stores of 15,000 square feet or more, Decathlon is firmly a big-box retailer, in the same mould as Walmart or Ikea. Big-box retail is not an easy format in India, where urban sprawl is restricted to certain metros and quality real estate is hard to come by.

But Decathlon has figured out a trick to rapidly snag prime real estate in the heart of its target cities at a considerable discount. The total store count is 61, in all states except Jammu & Kashmir, Himachal Pradesh, Uttarakhand, and some in the Northeast. Most of the store expansion started well after 2013, when Decathlon got its single-brand retail licence. (More on its real-estate strategy in part 2 of this story later this week.)

Decathlon’s biggest draws are price and assortment. It has become a space where customers are introduced to new sports via well-produced and affordable gear.

It has private-label brands for every sport including Flx for cricket that the company launched in India in 2011. A Kashmiri willow cricket bat sells at INR1,545, 15%-20% cheaper than in the open market.

Low prices nudge people to experiment with new sports they weren’t interested in earlier, says Chaudhari. For instance, Decathlon stores sell full archery sets for under INR5,000.

Attractive prices also mean customers pick up sports goods for non-sporting uses. For instance, polyester trekking bags, branded Quechua, are a hit among schoolkids, officegoers, and others who need a backpack for everyday use. The smaller-size 10-litre backpacks are priced between INR200 and INR500, competing with cheap brand-knockoff canvas bags available in small shops.

"At Decathlon, just walking through the aisles, I end up picking things I might need but won’t actually buy when I’m just browsing the website at home," says Srivastav, the cinematographer quoted earlier. Her favourite is the Decathlon on Sohna Road, Gurugram. It’s farther from her family home in West Delhi’s Dwarka than the Decathlon in Pacific Mall. But she makes the trip to Gurugram because the Sohna Road store carries a larger assortment.

"These are things I would only pick up at the store. Like, a water bottle, or the T-shirts they have for INR200-INR300," Srivastav says. "Last year, before our family holiday to Ladakh, we had planned to pick up fleece sweatshirts and jackets. But we also ended up picking up a towel for each of us — it’s not something we needed or generally buy [at Decathlon]. But we picked them up because they were just so handy and beautiful."

"There seems to be a wide range of customer profiles that are attracted — from people who need sports goods to the general public who buy convenience products. There is a wide range — from water bottles, night suits, and basic nightwear to mountain bikes," says Sreedhar Prasad, partner and head, consumer markets and Internet business, at KPMG.

“Convenience is a very large part of Decathlon’s [success] in India. The assortment appeals to all consumer classes, from upper and upper-middle to lower-middle class.”

How does Decathlon control prices? The private-labels-only strategy helps. This is also by necessity since India allows foreign direct investment only in single-brand retail.

Private labels give a retailer greater control over margins and assortment. This is unlike for a classic retailer that must constantly negotiate with vendors and manufacturers: In retail — whether general or specialty — margins are thin and need attention, while earning comes from volumes. Besides, with its own labels, Decathlon can price goods even at cost.

An intangible that Decathlon fans swear by is the shopping experience. Decathlon has been building open spaces next to its stores where customers can try out sports equipment before buying.

A newly opened Decathlon store in Faridabad has trampolines and table-tennis tables. Besides, several Decathlons in the country offer free coaching in sports such as basketball, meet-ups for runners, and other events that bring together enthusiasts.

"I come here with my daughter because she's into swimming and badminton," says Chandeep Singh, a resident of the Mumbai suburb of Chembur. ET Prime caught up with him as he stood by a mini-rink at the Decathlon store at Atria Mall, Worli, while his daughter rode a toy scooter. There were children testing out golf clubs next to the rink. A handful of adult customers took yoga classes in front.

"We came here today because it's a Sunday and we didn't have any plans. The play area is great to keep kids engaged on the weekend. I get everything for my daughter here. Only in swimming, I think they don't have much variety for kids," Singh says.

This brings us to the central question of Decathlon’s identity. Is it a specialty retailer, or just a big-box retailer with a theme? Truth is, Decathlon has carefully positioned itself to straddle the line between sports retailer and an apparel and accessories store for ordinary consumers.

"The success of any retailer is based on the six principles of location, price, assortment, quality, ease of shopping and navigation, and customer experience and delight," says Rajat Wahi, partner at Deloitte India.

"It has worked for Decathlon as it has created a 'wow' experience for customers while still being very affordable, having a wide range, and providing an opportunity for shoppers to try out products in-store without making them feel guilty about damaging or spoiling them."

What’s next for Decathlon in India? For a company its size, Decathlon is conspicuously quiet. Analysis of its strategy is hard to come by. Speaking to ET Prime on condition of anonymity, its store managers only indicate that more stores are on the anvil in major cities. Besides, the company's e-commerce operations (including all major e-commerce portals and its own website) will help it expand its cache to new customers. Data with the Registrar of Companies does not specify separate numbers for the e-commerce business.

Some hints about the future can be gleaned from Decathlon’s recent experiment in Singapore — a 5,000 sq m "Decathlon Singapore Lab" in association with that country's national sports agency expected to open early next year, complete with virtual reality- and artificial-intelligence-based innovations.

Before it gets to these new mousetraps though, Decathlon India’s growth plans are all about a canny location strategy that has given most other retailers the slip. We bring you that story soon.

Oasis in a dead mall: the Decathlon playbook

Several of the sports-goods seller’s humongous warehouse-type showrooms are in malls. How does it manage to bag such sprawling real estate? The trick lies in finding a ‘dead’ mall, taking up a huge anchor space at a discount, and reviving the mall itself in the bargain

Soumya Gupta   30 May 2018

A Decathlon store in Howrah, West B

Sunday afternoon. Parents and kids are milling about at a large Decathlon store on the first floor of a mall in downtown Mumbai. The older folk line up at racks full of sports gear, trying out racquets, while children zoom about on toy scooters or roller skates. There are at least four payment counters, and the checkout lines are long.

Outside, the mall is silent. There are a few people trickling into Inox Insignia, a luxury cinema, on the top floor. Apart from this, and a sparsely visited Rolls-Royce showroom on the ground floor, there's little activity. Most of the mall has empty glass facades of spaces waiting to be occupied.

This is Atria Mall in South Mumbai’s Worli. In Mumbai’s popular perception, Atria had become synonymous with “dead mall”. For almost a decade, it saw top brands come, set up shop, and then leave in quick succession.

In 2009, the Ruias opened the luxury mall, Palladium, about 1 km away from Atria Mall, capitalising on the latter's near-zero footfalls. Today, Palladium is a landmark in Mumbai, with every luxury brand coming to the country making a beeline for it.

Meanwhile, Atria Mall stagnated.

Until Decathlon opened there in 2017, moving in as its largest tenant. Atria Mall started getting regular footfalls, signalling a turnaround.

It’s not just Atria Mall. All over India, Decathlon has hunted for dead malls looking for a turnaround via a large tenant. Big-box retail is difficult to find in India, and the best quality is found in malls (or high-street shopping areas).

As we saw in part 1 of this story, Decathlon stores, with their assortment of everything from T-shirts to bicycles, need large retail spaces. This usually means setting up in the suburbs or on the outskirts of a major city, alongside an arterial road. In India, Swedish furniture retailer Ikea, also a big-box player, has followed that model by acquiring land on the outskirts of Hyderabad (Gachibowli), Mumbai (Turbhe), and Bengaluru (Nagasandra), among others.

Decathlon also has stores in the outskirts, like Anubhava Layout in Bengaluru and Azara Circle near Guwahati. But many of its stores are also located in the heart of the city, where shopping is concentrated in shopping malls, which are highly sought after, low on space, and high on rent.

Of Decathlon’s 61 stores in India, 14 are located in malls. Save three, all these malls at some point have been either dead, struggling, or under-occupied.

So, what kills a mall in India? Malls became the nerve centre of shopping in urban India in the 2000s. However, despite the insatiable appetite of Indian consumers, a large subsection of malls in India has ended up dead.

Once a mall is constructed, the owners can either lease out shop spaces to retailers — the ‘lease model’ — or sell them outright to individual owners — the ‘sell model’ — and completely recover their investment.

The lease model allows mall owners to control who sets up shop where, how large individual outlets will be, and when to move out retailers who are unable to pull in business.

But in the sell model, mall owners give up control. They can no longer decide what shops open in their property.

“Imagine you walk into a mall. There is a Pantaloons store on your right, and a bhajiya dukan [vegetable store] right next to it. There’s no way to stop that from happening in your mall because you no longer own the space,” says the owner of a mall-management and advisory firm who did not want to be named.

"Almost all the malls in India that have failed are sell model malls. That’s because once you sell out retail space, you will have recovered your investment, sure, but you will no longer be able to control the look and feel of your mall. That means your mall is hardly different from a shopping centre."

According to the person quoted above, malls need to be treated like hotels. There should be a well-curated look and feel, the right retail mix, zoning, and control on the ambience, he says. (Retail mix refers to the brands in a mall, and zoning is the areas demarcated in a mall by retail categories such as fashion, supermarket, and food.)

Often, mall owners find it difficult to bring on anchor tenants — the largest, ground-floor occupant of a mall. That’s because often tenants that need large areas require individual shop spaces to be merged with each other. This is why Atria Mall was unable to snag Shoppers Stop as an anchor tenant in 2015, according to a report in the Mumbai Mirror — some of the individual owners refused to budge on the rents they wanted.

"It’s almost like a land acquisition-type situation," Kunal Vardhan, joint managing director, Neelam Realtors, says. His firm founded and manages Atria Mall. "In some cases, we had to deploy our own capital, or even tell some individual owners that we will carve them out [from an upcoming store]."

Besides, with no control over who is setting up shop where, mall developers cannot decide on their property’s positioning.

"A mall has to have a proposition, a look and feel," says the mall-management firm owner quoted above. "With the sell model, anyone can demand to run any kind of business. An individual shop owner can insist that his daughter wants to run her boutique, or his relative wants to run a mobile repair shop, for example. The best, most successful malls in the country have always had tight control on the retailers in their mall and the space they are given."

That success is seen in malls like High Street Phoenix and Palladium in Mumbai or Select Citywalk in Delhi because of the control that the leasing model provides. When Swedish fast-fashion major H&M wanted space in both these malls, they were quickly able to clear prime ground- and first-floor space for them, shifting older tenants out. In the sell model, that would involve speaking to several individual owners.

Nowhere is the challenge of the sell model clearer than in the South Delhi neighbourhood of Saket, with three malls side by side.

"Select Citywalk has become the mall there. All the best large and foreign brands come to Select. But right next to it are MGF Metropolitan and DLF Mall, and both are doing poorly. It’s because Select Citywalk did not sell spaces," says the mall-management firm owner quoted earlier. This is the opportunity Decathlon looks for. A mall well located but on its last legs is the perfect opportunity to introduce big-box retail to neighbourhoods within a city, where large land parcels are hard to find.

Take Chennai’s Ramee Mall, located in the upscale Anna Salai neighbourhood. In March 2015, anchor tenant Shopper’s Stop announced it was closing its department store and a MAC store, citing performance that was "not up to the mark", with hardly any footfalls, according to a report in the Hindu Business Line. The mall saw a two-year period of non-activity. TripAdvisor reviews from this period call the mall "dead" and "empty". One reviewer says the mall was "private" enough to hold your girlfriend’s hand and go for a walk in peace.

In December 2017, Decathlon opened up a store in the mall. Its early days, but no other shops have yet gone there.

The effect is more pronounced in Atria Mall.

Decathlon and Inox were the first ones to sign up with Atria. But Inox opened its screens first, and Decathlon took the 15,000 sq. ft. store on the first floor shortly after. These were the first two large operations in the mall since its nadir in 2012, when occupancy had fallen to 3%.

"That was the day I knew Atria had turned around," says Vardhan, adding that Sunday is usually Decathlon day at the mall. "That deal with Decathlon was a good one," he says.

Atria has now signed a deal for a 40,000 sqel. ft. Big Bazaar, owned by Future Group, on the second floor of the mall. Coffee chain Starbucks is opening in the mall shortly. Vardhan is also in talks for a deal for a restaurant and a gaming zone.

There's another benefit to Decathlon. According to an executive at a real-estate firm, Decathlon can get a 25%-30% discount to the prevailing mall rents in a given area.

"An anchor tenant will always demand a better rental rate," the executive says. "Besides, retailers today are very clear on how high a rent they can pay. They are clear about running a profitable store wherever they are."

Decathlon’s kiss of life has rejuvenated dead malls across the country, with more coffee shops, cinema halls, restaurants, and department stores following in its footsteps.

To go to malls that other retailers will not touch is a sign that Decathlon is confident of pulling sales and is committed to chasing lower costs. The race is half won

Decathlon reports 11% growth for 2017, boosted by international sales

By Marion Deslandes

   

19 February 2018

If François de Witte, Decathlon CEO, qualifies 2017 as a year "of transition and transformations", the international sporting goods giant was nonetheless able to report strong growth for last year. The northern France-based retailer achieved a revenue of 11 billion euros in 2017, an 11% jump from 2016. This upturn is due, in large part, to the company's expanding operations abroad which grew 13.4%, to 7.6 billion euros. 

The company is bringing digital technology to its stores and betting on customer service - Decathlon

Of the 185 store openings carried out last year, 176 were outside of France. The company, which operates 1,352 points of sale in 39 countries, expanded into 10 new markets in 2017, including Australia, the US (where it has returned after an 11 year absence), Israel, Switzerland, Colombia and South Africa. 69% of Decathlon's operations are now carried out through exportation (compared to 67% in 2016 and 60.5% in 2014). 

Above all, however, Decathlon has reported a global increase in comparable sales of 4%, against 1% growth in French same store sales. It's a sign that, along with its multiple store openings, the company's export activities are growing intrinsically.

In France, Decathlon's revenue reached 3.4 billion euros, an increase of 3% compared to 2016. Over the course of the year, nine stores were opened in the brand's home country, expanding its domestic network to a total of 310 locations. No statement of retained earnings was made by the company which was voted France's favorite brand at the beginning of the year, but which remains fairly secretive about its balance sheet. 

Now describing itself as an "omnichannel retailer", Decathlon is pursuing digital integration by expanding its click & collect service and seeking to optimize its delivery conditions. The company's online revenues accounted for 4.5% of global sales generated in France. 

The brand is also aiming to improve its product offering. The company, which employs some 80,000 people, is in the process of segmenting its private labels, dividing them into individual sports and creating more agile and autonomous entities. "We are pursuing and amplifying the subsidiarity principle, creating conditions in which each of our collaborators can make the most pertinent decisions locally", stated François De Witte. 

The route of Decathlon's first direct block freight train which transported products across seven countries last autumn. - Decathlon

Closer, faster, more complete, seem to be Decathlon's watchwords for 2018. The company is also evolving its experiential retail strategy, aiming to offer 100% of its products on a try-before-you-buy basis. 

Decathlon also intends to continue developing its environmental efforts. The company's French branch, for example, plans to stop aerial transport of its products. Last autumn, the brand also piloted its first block train which arrived in the North of France from China, full of Decathlon products. 

Decathlon in figures Vitality and Responsibility: both of these values, values that Decathlon has been founded on for the last 40 years, are shared by more than 70,000 team mates worldwide. Being bold, thinking outside the box and pushing the boundaries - this is what guides everything we do. Our teams have been serving sportspeople since 1976, working at the heart of the action so as to understand their needs. Decathlon’s product managers, designers and engineers have all stood pitch, court, track and pool-side in order to fine-tune our highly innovative products. For us, sport is first and foremost a source of enjoyment and well-being. This is why our 20 Passion brands offer products designed to make it easier to enjoy sport, regardless of user age or ability. Overseeing product design like this, along with production and distribution, means we’re able to sell our items at extremely low prices, available exclusively from our stores and online. In the run-up to Decathlon’s 40th anniversary, the company’s activities experienced a sharp rise in 2015, with the opening of 140 new stores across the world, taking us over the symbolic 1,000 mark. New distribution markets, such as Slovakia and Thailand, have also welcomed their first Decathlon stores. At the end of 2015, Decathlon brand products were available in 23 countries via a network of 1021 stores.  

During the COP 21 that took place in Paris, 195 countries collectively signed a historic agreement to combat global warming. In September 2015, in order to increase quality of life for all, the UN presented it’s 17 sustainability goals to the whole world, including both private and public sector entities. Decathlon supports these sustainable development goals, and has integrated into its Sustainable Development policy those upon which its activity has a direct impact. Here are a few examples of how we are contributing to their implementation:

GOOD HEALTH AND WELL-BEING Our purpose is to make sporting and leisure goods available to people all over the world. By making and distributing sports products that are useful, aff ordable and of good quality for as many users as possible, we help contribute to healthier life-styles and wellbeing.

CLEAN WATER AND SANITATION Our health depends on the quality of water used in farming, the quality of the water in the seas and rivers, and the quality of the water that we drink. For these reasons, Decathlon has implemented a specifi c water quality strategy with our subcontractors. Decathlon evaluates and manages its subcontractors that eject water into the natural environment to ensure conformity with global criteria fi xed by the IFC. At the end of 2016, 100% of our subcontractors concerned will follow this control process.

DECENT WORK AND ECONOMIC GROWTH Decathlon acts in order to improve human and social conditions for every one of its industrial factories, which are regularly followed up and monitored. We work hand in hand with our subcontractors to continuously improve conditions. Our approach evolves permanently, our intention is to gradually increase how demanding we are in terms of safety and respecting human rights.

SUSTAINABLE CITIES AND COMMUNITIES As part of its expansion strategy, Decathlon has implemented a certifi cation strategy for its buildings. At the end of 2015, 51 sites are certifi ed, including stores, Passion brand HQs and warehouses. Decathlon will continue these eff orts to environmentally certify their buildings, and develop buildings that create positive energy.

RESPONSIBLE CONSUMPTION AND PRODUCTION To contribute to the preservation of ecosystems in the cotton industry, Decathlon is committed to only using sustainably sourced cotton by 2020 for its Passion brand products (recycled cotton, organic cotton or BCI sourced cotton). As we have a big role to play in promoting a more responsible consumption, through our environmental labelling initiative, we inform team mates and customers of the environmental performance of our products. This we began in 2015 on our e-commerce site for some textile products.

CLIMATE ACTION Because we believe in growth that is sustainable and respectful of the environment, and that the natural environment is our playing fi eld, Decathlon measures its CO2 emissions since 2011, including the impact of our products.

At Decathlon, we really believe that what is good for people and the environment must have positive impact in the short, medium and long term for our economic success and the sustainable development of our company. To demonstrate its engagement to sustainable development, Decathlon intends to stabilise its CO2 emissions for 2019 at the same level as they were in 2014. We also believe that our international development will only be achieved if we integrate into our corporate strategy all the social and environmental challenges that the world is facing today. This report, which is based on our sustainable development policy, presents our main achievements in 2015. You will also discover the various commitments of many of our team mates, in order to make Decathlon more environmentally friendly, more attentive to respecting human rights and more focused on the enrichment of men and women around the world.

1/ THE TEAMS Process Leaders: - Working around a series of core issues (GHG balance, eco-design, supplier environmental management, human responsibility in production management, etc.), they defi ne: the strategy, the training courses and the assessment tools. - They coordinate a network of environment leaders or sustainable development managers in their specifi c area. SD in Production Managers: - Carry out HRP and Environmental responsibility in production assessments, coordinate results performance on the panel, and help subcontractors to improve their skills by training on the ground. Tasked HRP Assessors (1): - Constituting a network of collaborators approved as Human Responsibility in Production or Environment assessors to carry out assessments among our subcontractors. Commissioned Environment (1): - Within a specifi c area, they coordinate: the implementation of environmental actions, training, environmental assessments, communication, etc.

2/ MANAGEMENT Decathlon leader: - Shares the sustainable development strategy with the Shareholders. Sustainable Development leader: - In conjunction with the CEO and the key players in the business, and consistent with the business strategy, defi nes the sustainable development policy in line with the focus areas put forward by the sustainable development team and collaborators. - Coordinates a team of Leaders for the various sustainable development processes (GHG balance, eco-design, human responsibility in production, communication, sustainable development reporting, etc.) and a network operating cross-functionally within the business. - Ensures adequate human, fi nancial and material resources to enable eff ective implementation of the policy. Steering Committee: - Comprises representatives from the various branches of the business (retail, logistics, production, design and quality) and the diff erent countries. - Gives a transversal view of the sustainable development strategies and co-opts them. Shareholders committee: - Approves the strategies and objectives put forward by the Decathlon leader

3/ INTERNAL AUDIT Internal auditors: - In conjunction with tasked SD in production Managers and SD Assessors, internal auditors audit the internal personal health and safety assessment conducted on our subcontractors. - Every year, they present a subcontractor safety risk analysis to the audit committee, which is one of the sub-committees of the Shareholders committee. 

4/ REPORTING AND COMMUNICATION Sustainable development reporting process leader: - Collects quantitative information, implements internal reporting protocols and writes methodological notes. SD communication managers: - Draw up the Sustainable Development Report in accordance with regulations. - Produce information campaigns designed to raise awareness of sustainable development at Decathlon, both internally and externally.

5/ REGULATIONS SD Legal Experts: - Monitor all legal information pertaining to sustainable development and manage compliance status in terms of the various obligations. - Assist with implementing regulatory obligations. - Provides support with regard to day-to-day regulatory issues.

THE VARIOUS ROLES LINKED TO SUSTAINABLE DEVELOPMENT ACTIVITIES Our aim is to push ahead more quickly with our international expansion. Also, we feel that the pyramidal decision-making structure is no longer the most suitable in terms of the needs of both the business and its team mates. For both of these reasons, we are implementing a method of operating as an international network, which also applies to sustainable development governance. There is a sustainable development global leader and a global leader for each subject. These leaders can be based in close proximity to the relevant issues. The role of the global leader for each subject is to increase the autonomy of each local manager. Similarly, it is possible to play a local role and have a mission that benefi ts the global picture, by means of suitable measures: for example, certain Sustainable Development in Production managers are working to develop our global tools at the same time as their local eff orts in conjunction with the global leader for the subject. Everywhere Decathlon operates, the specifi c features of its activity diff er (production, design, logistics, distribution). Depending on the specifi c needs of the country, resources are allocated to fi ll the roles required to implement the sustainable development strategy on site. Those involved in sustainable development work as part of a network, using Decathlon's global SD policy as a basis. The global SD strategy is shared by Decathlon’s CEO with the shareholders committee. Internal auditors, who report directly to the shareholders committee, conduct regular ground-level audits to ensure that safety aspects in particular are being correctly applied.

Progress through dialogue Talking about Decathlon stakeholders means talking about how we are, how we achieve and how we progress. There are three key groups of stakeholders vital to our success. First and foremost, our team mates Our management is based on trust, responsibility and skills development. Dialogue is permanent and ongoing, punctuated by regular opportunities for discussion: monthly meetings and the annual meeting. Our relations are direct and genuine. And our team mates are the front-line ambassadors for our business, our Passion brands and our products. Then, our customers. They are involved right from the product design stage, and their satisfaction is one of our key concerns. Our Passion brands enable us to meet their needs, as diverse as these are. Lastly, our subcontractors. We consider our subcontractors to be partners, support them in terms of their development and compliance with our requirements. And, obviously, all other stakeholders who drive our development every day. 

What is Decathlon’s aim in this dialogue with the outside world? Throughout the year, I engage in discussions – on behalf of the business – with diff erent people from government authorities, NGOs and other businesses (both from and outside our activity sector), and I pay careful attention to their feedback about our strategies. Together with the team, we study their opinions and the possibility of incorporating them or not. As the issues are extremely far-reaching, it is a good idea to draw on external stakeholders to determine our priorities. We favour collaborating with organisations who tackle issues in a constructive and pragmatic manner, and who are open to sharing experiences. We are also building on knowledge observed externally in order to identify innovative projects, and thus to directly infl uence company strategies. 

Which are the concerns most commonly shared by our stakeholders? One of the main concerns is the environmental management of subcontractors, and, in particular, our actions to reduce hydric stress, water pollution and climate change. Our responsible purchasing policy, and particularly the adaptation of our strategies, are also carefully studied: working conditions, building safety, fi re safety, workers' pay, to name a few of the issues tackled. And, because we are a rapidly growing company, we face a big challenge in terms of the environmental impact of our products and our drive to promote sustainable consumption. We have high expectations of eco-design for our Passion brand products, and the circular economy. 

 How is Decathlon responding to this? We respond by launching pilot projects, and by adjusting our CSR policy when necessary. We work hard on our CSR strategy day in, day out; we want it to be dynamic. The company makes choices and, as befi ts its capacity, is expected to explain these choices. It is therefore necessary to prioritise whilst remaining open to suggestions designed to continuously improve our actions and projects. What is your best achievement? What do you particularly like about this mission? I particularly like the project we’re doing with Impactt, to improve working conditions among our subcontractors. This initiative is designed to take us above and beyond regulatory compliance and on-site audits. When we were quoted in the NGO Clean Clothes Campaign’s report in 2014, I contacted Rosey Hurst, as her approach called Beyond social compliance is innovative, working with subcontractors to co-create sustainable solutions that reinforce their own people management. I particularly like collaborative working with stakeholders, as there is no competition when it comes to these CSR issues. We have many challenges in common with numerous other businesses, and I strongly believe in sharing good practices in order to lend greater force to our efforts.

OUR ACTIONS OUR OBJECTIVES FOR 2019 We recruit people who play sport, with vitality, who are practical and service-minded. 86% of team mates are happy to go to work. We encourage the playing of sport. We play sport together and celebrate our victories. All team mates play sport regularly, at their own pace and level. All team mates play team sports and celebrate victories together. We instil and facilitate team mate development from day 1, through allocation of wide-ranging responsibilities. Our decision-making takes into account the consequences as closely as possible (principle of subsidiarity). All team mates are responsible for their development and learning. All team mates will thrive as a result of increased responsibility. We encourage a culture of transparency and circulation of information that each and every team mate requires to exercise their responsibilities. All information – reliable and relevant - available in real time. We are uncompromising when it comes to the in-house safety of our team mates. All team mates feel safe in their workplace. All managers measure and coordinate health and safety conditions for their teams. We share the value created and enable as many people as possible to co-own the business through our team mate shareholder scheme. All team mates are Decathlon shareholders. 

We use our local and trained production teams to help our subcontractors to improve. 85% of assessments conducted by our internal teams. Supporting our subcontractors through workshops, training sessions and awareness-raising days. We regularly assess our subcontractors to check that working conditions comply with our social charter. 80% of subcontractors (level 1) assessed as A, B or C according to our audit grid. We develop tools and methods in line with the latest global issues and challenges. Rollout of capacity building pilot projects in Bangladesh, China and India. Helping to harmonise social assessment methods (OECD working group, textile supply chain working group reporting to the Delegation for European and International Aff airs). Update of our social charter and our assessment grid (in 2016).On the bases of our environmental impact assessment, we defi ne our action plans for each specifi c activity. Stabilising greenhouse gas emission volumes with respect to the reporting year of 2014. Helping to harmonise environmental impact calculation methods (European Union working group to defi ne multi-criteria calculation methods for the environmental footprint of products and organisations). We measure the environmental impact of our products to reduce them through eco-design, whilst retaining the best possible quality/value for money ratios for our customers. In 2016, 100% of product engineers (excluding engineers in metal, plastics and composites manufacturing processes) will be trained in environmental assessments of products. In 2016, 100% of textiles, 50% of footwear and 50% of heavy stitching (tents, backpacks, etc.) will have been assessed for their environmental impact. In 2020, all cotton used in our Passion brands will be environmentally friendly (organically grown, from the Better Cotton Initiative, or recycled). We are building new certifi ed sites in line with the most rigorous environmental standards, and improving the energy eff iciency of our sites. Ensuring that all our new company-owned sites are certifi ed. Stabilising CO2 emissions linked to energy consumption at our sites (kWh/m2 /year) compared with the reporting year of 2014. We optimise management of waste generated on our sites. Continuously increasing our waste recycling rates in both our stores and our warehouses. We optimise logistics activities by reducing the distances our items travel, by virtue of our global warehouse network, by maximising lorry loads and by prioritising multi-modal transport (train, waterways, etc.). A 15% reduction in CO2 emissions for items shipped within Europe between 2015 and 2020. We improve the environmental performance of our subcontractors’ manufacturing sites by helping them to continuously reduce their environmental impact, in line with their specifi c risks. Ensuring that 100% of wastewater discharge complies with our specifi cations in 2016. Assessing all factories concerned on the management of their wastewater discharge in 2017. Assessing all factories concerned on the management of their hazardous waste and air emissions in 2018. We request the opinions of user customers regarding their experiences with our products, and their user satisfaction, in the interests of continuous improvement. Monitoring of customer product reviews by design teams. Triggering initiatives to improve products scoring less than 3 in customer reviews (based on 25 global reviews on a rolling 12-month basis). We develop safe, sustainable and quality products through a global strategy to manage the quality of our product design, production and distribution. Continuously improving the product returns rate (annual targets fi xed by product typology). In the event that quality issues are detected, an analysis to examine the causes is carried out and suitable corrective action implemented to eradicate the problem. We build in chemical risk prevention right from the product design stage through to end usage. Ensuring that all of our subcontractors are committed to adhering to our restricted substances list and test at least one product per production site to verify compliance. In the event of an issue or adverse skin reaction, handling the issue within 3 days and putting forward a solution in under 45 days.We display our products’ environmental performance on all labels, in complete transparency, to further responsible business and consumption. Giving 100% of our products an environmental score by 2018. We organise the Green Awards to highlight and reward the best environmental actions spearheaded by collaborators. Enhancing the expertise and commitment shown by a person or a team in the interests of CSR. Customers taking part in the voting stage. We publish an annual CSR report on our key strategies and actions, made available online to facilitate access to information, and we strive to make data more reliable. Ensuring our key stakeholders are happy with the quality and relevance of the information published. Obtaining an unqualifi ed opinion from an independent third-party body about the accuracy of our data by 2017.PRACTICAL SOLUTIONS: A LOOK AT THOSE INVOLVED Each team mate is required to help stabilise Decathlon’s GHG emissions, depending on their particular responsibilities and area of activity: • Product design: eco-design actions, for instance our design teams select product materials with less of an environmental impact, by our design teams. • Production: environmental management of our subcontractors, or the development of local sourcing, led by our production teams. • Product transportation: various actions are coordinated by our logistics teams, such as optimising sourcing patterns, using multimodal transport, and maximising lorry loads. • Travel: to reduce their impact, customers and team mates can opt to use soft transport methods: car-sharing, cycling, train, scooters, etc. Local schemes are encouraged. To limit its team mates' commuting and work-related travel, Decathlon recommends they use video conferencing wherever possible.• Retail: local initiatives to choose construction materials for our sites are led by our construction teams. The same applies to improving the energy eff iciency of our stores and warehouses, which is coordinated by local energy leaders. • Waste management: each store or warehouse team is responsible for sorting and recycling the waste generated by their activities. Successive GHG assessments conducted since 2007 show that products (taking their entire life cycle into account) are Decathlon’s biggest source of greenhouse gas emissions. Eco-design is therefore one of our defi nitive levers for action!

decathlon training :

• Integration: training courses vital to mastering the basics, acquiring the fundamentals, and to be followed during the integration period. • Initial training: courses designed to help team mates improve their skills, plan their work and achieve within their role. • Development training: training courses designed to improve levels of proficiency. • Additional training: courses that can be followed independently of a team mates's role, or to develop skills useful for a future role. The PTP is the company's own training plan, the result of capitalising on all the skills identified as being important when exercising responsibility.

READY FOR RESPONSIBILITY! At Decathlon Exchange, “Each one of us develops our self-confidence to enable us to embrace challenges; this is the purpose of our internal training centres dedicated to management. "Ready for responsibility" is all about taking decisions and making mistakes, but above all learning from these. Since 2005, the Decathlon Exchange team has focused more intensely on this drive to encourage team mates to take on challenges and responsibilities, and to safeguard the longevity of managerial skills that have made Decathlon the success that it is.Promoting diversity and equality
Diversity is an issue of particular importance to Decathlon. Our managers maintain diversity within their teams by recruiting a wide range of profiles, all with different qualifications and from various backgrounds.
Thanks to internal career management policies, team mates recruited in their native country can decide to continue their professional development by working in other areas of the world. Little surprise, then, that we have no fewer than 94 different nationalities working at Decathlon (1).
Since the start of 2010, France has introduced diversity managers who are responsible for disability,age diversity and workplace equality:
A few months ago, Decathlon’s SportsLab launched a project designed to promote team mate well-being at work. How did this project come about? Both quality of life and well-being at work are part of Decathlon's DNA. At Decathlon SportsLab, we hope to bring our “body and mind” user approach to all our teams worldwide, by sharing with our team mates good practices that we have observed by watching people play sport. Playing sport, adopting the correct posture, instilling good eating habits and promoting healthy relationships among colleagues are all vital if we are to reinforce the fundamental principles underpinning our company. We are also investigating modern and accessible ways of instigating well-being, and began sharing these with team mates on our Villeneuve d'Ascq Campus at the end of 2015. Which issues are you focusing on to improve team mates' quality of life at work? We’ve decided to stick to issues that are important to those we're trying to help: breathing and cardiac coherence, work postures, meditation and well-being music. These are subjects that come with scientifi cally-proven warnings, which makes them extremely important issues for us. We remain open to other subjects, obviously, which is a basic prerequisite for any business, especially one pioneering innovation. Our goal is that, regardless of their role and geographical location, team mates can access tutorials or information designed to help them incorporate good practices into their everyday lives, and at their own pace.How do you reach out to team mates and inspire them to change their habits?
Right from the start of this project, we’ve been creating a community on Decathlon's social network, as well as an internal blog. This enables us to promote the issue, and allow teammates who have already adopted good practices to, in turn, pass on what they know within their own teams. We have also organised sessions at Alive [our centre dedicated to exploration and innovation] that enable people to discover relaxing music, explore mindfulness and achieve cardiac coherence.
These techniques – which touch on areas of personal development - will only be eff ective ifthose trying them are actually committed to making them work. A patient and non-intrusiveapproach is required. The purpose must be properly explained and conventions exploredin practical ways. The project will expand and grow organically, this being a long-terminitiative.