Europe is home to some of the world’s most iconic companies. Many started small to quell a single person’s curiosity before exploding into a global phenomenon. As a new resident, stories of big, successful European brands have piqued my interest. What’s their story? How did they transform into the giants they are today? How have they sustained their legacy over time? Those are some of the questions I explore in this new series.
Decathlon doesn’t crave attention. It doesn’t sponsor prominent sporting teams, carry a star-studded marketing presence, or claim a cult following like Adidas or Under Armour.
And yet, it’s the world’s biggest sports retailer.
Decathlon has built itself into a sportswear giant, expanding to bring everything, from product research and development to sales and, eventually, repair and resale, in-house and under its own brand.
Its business model has kept it growing despite global disruptions and its inability to crack some of the world’s biggest markets. Through it all, the company has been laser-focused on increasing access to sports, offering €25 hiking boots and €220 bikes for almost 50 years.
That’s part of what founder Michel Leclercq wanted when he started Decathlon in 1976. He was partly inspired by the now-bankrupt American chain Sports Authority, which had megastores spilling over with great deals on anything and everything sports enthusiasts could want, Decathlon’s CFO Jean-Marc Lemière said.
As Europe didn’t have anything like it then, Leclercq wanted to bring multiple sports goods under one roof to achieve the ideal trinity of accessibility, variety, and affordability.
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Retail chops ran in Leclercq’s blood. Gérard Mulliez, Leclercq’s first cousin, founded the French departmental store chain Auchan. Even today, the Mulliez family has a majority stake in Decathlon.
Private ownership would prove vital as it has allowed Decathlon to reinvest in the company over the years and focus on its long-term ambitions over profitability. It also kept its finances healthy, unlike Sports Authority, which folded in 2016 due, in part, to a heavy debt burden.
Despite the strong business network around him, Leclercq wanted to keep an arm’s length from the family business and pursue an entrepreneurial career independently. His choices boiled down to selling books and sporting goods. As a hiking, biking, and sailing enthusiast himself, it was clear what he’d go with.
Leclercq then gathered a small but driven group of six other sports lovers and started to build the company out of an Auchan parking lot in Englos, France.
The humble beginnings of Decathlon were marked with doubt and hesitation as Leclercq wasn’t sure his idea would gain traction. But much of those fears withered away when the founders’ day one sales reached five figures (the exact number was 9,999 Francs, so the group bought a pair of socks to round it up).
“I think he [Leclercq] is now 80-something, and when I do meet with him, he is still very much thinking about the future, what will happen, things that we should be working on for the next 30-50 years or so,” Lemière told Fortune.
Decathlon has faced its fair share of competition in a burgeoning sports goods market. In effect, the company has had to go head-to-head not just with individual brands but also with multi-brand stores like Dick’s in America or Intersport in Switzerland. Still, it’s emerged as a world leader in sporting goods.
Nearly half a century later, the group has 101,000 employees, over half of whom are shareholders in the company. Decathlon’s frugality and appetite for investing in sporting access have made it a juggernaut in the sector.
3 things that helped Decathlon conquer the world:
1. Bringing things in-house
Decathlon’s most significant selling point has long been its affordable pricing. Leclercq clearly didn’t want to exclude consumers from sports because they couldn’t afford the equipment.
But to do that would prove challenging, as competing on price while ensuring durability could make or break the company’s reputation. The only way to achieve that was by keeping profit margins low, even if that meant adopting unusual strategies.
And that’s what the French company did—it ensured this philosophy was hard-wired into its business model early on and was at the center of every decision.
Decathlon brought its research, design, production, and distribution in-house and limited intermediaries in its supply chain. It initially tested the format with cycles, and although the pushback was immediate, manufacturers soon warmed up to the brand’s approach, given its growing popularity.
Today, Decathlon owns 20+ brands, including Quechua and Domyos, covering 80 different sports and is a key player in the global sporting goods market, valued at over $500 billion.
“Decathlon’s proposition has resonated with consumers across the globe as health and fitness has become more of a priority,” Chloe Collins, head of apparel research at data analytics firm GlobalData, told Fortune. She added that the affordability of its products made it indispensable even under harsh economic conditions.
The company keeps its marketing spend to a minimum, occasionally flaunting a big campaign. One such example is the partnership with French footballer Antoine Griezman, who will help co-create products for Decathlon's Kipsta brand.
Competing to sell affordable goods is always tricky, especially when international trade allows cheaper products to enter the market. That means its clothes and equipment don’t always look stylish in an athleisure market filled with the likes of Lululemon and Adidas.
Decathlon is not necessarily going for fashion. Instead, it’s grown its fanbase by making high-quality equipment that provides the most bang for the buck.
One hack has been using fewer stitches on products to minimize the fabric material used. Take Decathlon’s Quechua-branded Arpenaz backpack, for instance. The hiking bag may not be an artistic centerpiece, but it does come with a 10-year warranty.
There’s no better way to describe Decathlon than a living, breathing factory. In the late 1990s, Decathlon set up SportsLab to gain detailed insights into body movements that could then inform its product design. Now, the company has dedicated design centers, including its flagship location for mountain sports in Mont Blanc Valley, France.
It also has local production hubs in its booming markets, such as China and India, which minimize transportation costs.
Another of the private French company’s efforts to improve access has been building its e-commerce presence. While Decathlon has small and big stores, it has also invested in simultaneously growing its online retail channel, Collins highlighted.
“Decathlon has found a strong omnichannel balance, with online sales accounting for 17.4% of its revenue in 2023. This blend is important, as while online will continue to grow faster than offline retail, stores remain a crucial touchpoint to connect and engage with shoppers,” she said.
2. Keeping a keen eye on trends
Decathlon was a first-mover in many ways. Way before high-street companies entered secondhand retail, in 1986, the French company launched an event series, Trocathlon, to help customers exchange used equipment. It also eventually established a “Second Life” platform dedicated to all things secondhand, from golf clubs to treadmills.
A big part of the motivation behind secondhand trade is also to do better for the environment. While Decathlon already owns the upstream, it’s trying to tie the downstream back to it by allowing the buyback of gear, purchasing cast-off rackets and jackets, and offering to repair equipment. It also eliminated shoe boxes for environmental and logistical reasons for most footwear.
Among its green goals are a 40% reduction in greenhouse gas emissions by 2030 and net-zero emissions by 2050.
“I think Decathlon has always been perceived as very innovative or disruptive,” Loic Sadoulet, an affiliate economics professor at INSEAD, told Fortune. He added that the company didn’t mind risking the move from a capital expenditure-heavy model to one focused on operating expenses when offering rentals and repairs simply because it was a more sustainable approach.
During its lifetime, Decathlon has dabbled in several new ventures that link back to its raison d’être—to make sports within everyone’s reach. The company partnered with the Paris Olympics last year, its most high-profile collaboration and the first time Decathlon backed a team of athletes across 21 different sports.
“I think Decathlon has always been perceived as very innovative or disruptive."
Loic Sadoulet, affiliate economics professor at INSEAD
Under CEO Barbara Martin Coppola (ranked #62 on our Most Powerful Women list, 2024), Decathlon also launched an investing arm called Pulse last year to continue backing innovation in the sporting realm.
It becomes part of a virtuous cycle: when Decathlon invests in technology that, in turn, improves the quality and durability of own-brand products, it limits wastage, promotes resale, and helps it keep its promise of affordable sporting goods.
A big part of succeeding in new things is knowing when to stop doing old ones. In hindsight, while Decathlon’s story seems like a smooth, linear ride, it was a lot of trial and error, much of which it could afford to do because it had the cushion of private ownership with few but loyal shareholders.
During the pandemic, Decathlon closed the last of its brick-and-mortar stores in the U.S. to tweak its business model to focus on e-commerce. The company also shut shop in Sweden last year, a market that proved tricky amid low demand and rising costs. Some markets took more patience, such as Germany, where cultural differences in retail shopping made it hard to crack the market, CFO Lemière said. Decathlon took about 23 years before it clocked in a profit there.
Meanwhile, it has continued to grow in China and plans to increase its retail presence there in the coming years.
“Decathlon has been a very entrepreneurial organization,” Sadoulet said, adding that it has shown “resilience to go on and the courage to know to stop.”
3. Recruiting the right people
Decathlon's employees aren’t just the average salespersons or analysts. They’ve been shareholders in the company since the 1980s.
Employees’ tenures tend to be long, highlighted Lemière, who has been at the company for nearly 23 years. He’s proud of how the company carefully picks its employees based on who they are as people before looking at their qualifications.
“Instead of recruiting knowledge, [Decathlon] would recruit profiles … this is still very much in the DNA of the company,” Lemière said. “I think that our IQ at Decathlon is very average. But we are super committed [to] the purpose of the company.”
CEO Coppola told McKinsey in a 2023 interview that because the company’s values guide every decision, they attract employees with a passion for sports and a spirit of entrepreneurship.
“We minimize hierarchical structures to enable entrepreneurship at all levels,” she said. “It is the teammates who deal with our customers daily who have the most direct access to our consumers, so we must listen to them no matter their level.”
Lemière says the company has nailed its people strategy and understanding of sports users. However, its main area of work is to be more data-driven in future investments.
Decathlon has been doing something (or everything) right if it’s won the loyalty of cash-strapped customers and employees while commanding the top spot in a booming sports market.
In the most simple terms, it found a void in the nature- and sport-loving European market, tapped into it, and built a monumental business out of it. So, Decathlon is as much in the business of big ideas as it is in selling cycles and sports bras.
Baby steps into the future
Despite this, Decathlon is up against a tough market and has ambitions to transform itself.
The company’s U.K. operations plunged into a £2 million loss the previous financial year as it pumped five times that amount into transforming the business. Some of its challenges are out of control, such as the high cost of living influencing people’s purchasing decisions.
Last March, Coppola announced a strategy shift to make the company more akin to a sports brand for novices and professionals rather than a brick-and-mortar retailer. That’ll pit Decathlon against big-league athletic labels like Nike and Under Armour.
The revamp will change the look and feel of Decathlon’s stores for customers, geared at making the shopping experience more “intuitive” (perhaps a nod to Coppola’s time at furniture retailer Ikea, which is known for its serpentine stores). The layout “will promote efficient browsing, easy comparison, and a memorable shopping experience, creating a positive and enjoyable journey,” the company said.
It remains to be seen how the new strategy pans out in the coming year. It’ll also be Coppola's first major pivot against a fast-evolving retail market.
Despite the years of growth, the man behind Decathlon, now in his mid-80s, would rather know less about the retailer's gigantic global presence. Lemière once asked Leclercq if he knew the company's market share.
“Michel said, 'I have no clue, and I don't care because what I'm doing is to create the conditions to create the market',” said Lemière.
Fortune wants to hear the stories of European companies with a global footprint that's touching the lives of millions of consumers worldwide. Get in touch: prarthana.prakash@fortune.com
