Winterburn-sprinfield aquisition

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  • Publicado : 23 de enero de 2010
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1. EXECUTIVE SUMMARY 2
2. TREND ANALYSIS 3
2.1. SPORTS GOODS MARKET IN THE UK 3
2.2. CLIMATE CHANGE 4
2.3. CONSUMER PROFILE 6
2.4. OPERATIONAL MANAGEMENT 7
2.5. BRAND 8
3. FINANCIAL ANALYSIS 9
3.1. WINTERBURN 9
3.1.1. Investment ratios 10
3.2. SPRINGFIELD 12
3.3. ACQUISITION FORECAST 13
4. RISK ANALYSIS 16
5. CAPITAL EXPENDITURE 18
6. BUDGETING 19
7. MERGES AND ACQUISITIONS 21
8.CONCLUSION 23
9. REFERENCE 24
APPENDIX 1 WINTERBURN AND SPRINGFIELD FINANCIAL PROFIT AND LOSS ACCOUNTS. 25
APPENDIX 2 WINTERBURN AND SPRINGFIELD FINANCIAL RATIOS TABLES AND GRAPHICS. 27
APPENDIX 3 TABLES FOR COMBINED FIGURES FROM WINTERBURN AND SPRINGFIELD YEAR 09. FINANCIAL FORECAST FOR ACQUISITION YEAR 10 30

1. Executive Summary

This report analyses, compares and advise the director ofSpringfield Limited over the consider acquisition of Winterburn Limited.

It provides information about the market trends; focusing in the retailing of winter sports good in the UK; supply a risk and capital expenditure analysis of the proposal take over; give proposals for the marketing strategies of the combined companies as well as outlined the budget for the business expenses. It alsocomments over this specific acquisition and its implications for the companies.

2. Trend Analysis

2.1. Sports Goods Market in the UK

According to Mintel, the UK is the third largest retail market in Europe. The economic cycle in which retail market has been place for several years has enjoyed a good combination of low interest rates, low unemployment and rising house prices that have helpedto establish the British economy as one of the strongest in Europe. However, recent rising on interest rates and its effects in the housing market have changed consumer’s attitudes who have became more cautious focusing their expenditure on price and value.

The Sports Industry Research Centre reported by 2004 that the UK market for sport goods was worth £5 million and demand has increased by18.2% since 2000; a small proportion behind growth of total spending with 20.3% and total retail sales with 19.4%. At least 28% of the sports market belongs to footwear.
Sport specialist channels dominate the UK sports goods market; they have rapidly growth 39% from 2000 according to Mintel. They enjoyed the preference among serious athletes who find superior staff knowledge and after sale servicemore appealing to their purchasing choice.

There are several driving factors for this market, in recent years the most significant have been:
Lower prices, fashion appeal of sport brands, awareness of importance of exercise and healthy diet. Those have provided new market segments and niches and have seen the rapid expansion of new sport chains and sport superstores.

Mintel’s “SportsParticipation – UK, Leisure Intelligence, July 2005” found that on 2005 63% of UK adults are now taking part in sport on a regular basis (once a month or more frequently during the season). This is due to the increasing focus on the importance of exercise and healthier lifestyle especially in the media. Nevertheless research also found that only 13% of the adult population buys sportswear specificallyfor active participation or exercise.

The 2012 London Olympics will represent a great support opportunity for sport retailers participation over the next years, its legacy would create a change in purchase patterns encouraging new customers to take up on sport and exercise.

2.2. Climate Change

As the seasonal element is vital for the Industry one important factor to take in to account isthe growing concern for global climate change.
Winter sports centres will be increasingly at risk from shorter seasons and unreliable snow cover due to their vulnerability to climate change. Researches have shown already significant snow cover reduction in the Alps over recent years. All this will affect life-styles, changing and creating patterns of leisure consumption and in term will affect...
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