Value Creation Case Studies

Al-Ikhsan Sports Sdn Bhd

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Al-Ikhsan Sports Sdn Bhd

Background

  • Al-Ikhsan is the largest multi-brand sports retailer in Malaysia with over 100 corporate-owned outlets and ~40% market share. The company retails sports equipment, apparel and footwear from major brands such as Adidas, Nike, Puma, Asics and Lotto.
  • Al-Ikhsan is the principal owner of the brand AL and markets various sports goods under the trademark AL Logo.

Investment Rationale

  • A market leader with strong outlet presence in peninsular Malaysia
  • Attractive & robust domestic sportswear industry with CAGR of ~8% in the 5 years prior to Ekuinas’ entry
  • Clear future growth drivers through private label and Omni- channel opportunities
  • Margin improvement opportunity via business process optimisation and investment in technology

Transaction Details

Investment type
Investment in a strong Malaysian company
Acquisition Date
July 2016
Ownership
35.0%

Key Value Creation Metrics

  • Growth Strategy

    • Expanding market reach via new category specialist store concepts i.e. Football Republic & new lifestyle brand
    • Strategic planning of outlet development and store expansion
    • Creating long-term strategic growth plans for private label / licensed brands

  • Corporate Governance & Financial Discipline

    • Implementation of strong corporate governance, performance reporting and improved accounting controls
    • Capital structure optimisation and strengthening of working capital management
    • Strengthening long-term financial planning and merchandising planning and forecasting process

  • Technology Transformation

    • IT system transformation through upgrading of ERP system
    • Optimising business decision making process via leveraging on BI analytics
    • Positioning company for digital era – rolling out of e-Commerce, CRM and Omni-channel platform

Ekuinas has contributed so much into ‘corporatising’ Al-Ikhsan as the Company is now run by industry professionals. This collaboration will continue to add value to Al-Ikhsan’s long term growth strategies.

Tuan Haji Ali Hassan

Founder & Chairman