KUALA LUMPUR – August 3, 2016: Ekuiti Nasional Berhad (Ekuinas) is making its entry into the retail sportswear business following the acquisition of a 35 per cent stake in bumiputera sportswear retailer, Al-Ikhsan Sports Sdn Bhd (Al-Ikhsan) for RM68.6million.
The deal, which is Ekuinas’ first investment this year, also includes full acquisition and injection of Al-Ikhsan’s homegrown sportswear apparel brand AL Sports, to leverage on the increasing interest in health and fitness among Malaysians.
In a statement, the government-linked private equity fund management firm said that branded sportswear retail sales in the country are expected to grow by eight per cent per year, to reach RM2billion by 2020.
Ekuinas pointed out that in neighbouring countries such Singapore, Indonesia and Thailand, it is expected to grow past the RM13billion mark within the same period.
“With its market leading position in multi-brand sports retail in Malaysia and also one of the largest in the region, Al-Ikhsan is well placed to capitalise on this trend owing to Malaysians’ flourishing interest in sports as well as growing awareness of the importance of living an active and healthy lifestyle,” the statement reads.
Ekuinas’ chairman Raja Tan Arshad Raja Tun Uda said that the investment marks the firm’s entry into the sports retail segment, extending its retail portfolio beyond the current food and beverages companies.
“The retail segment is one of Ekuinas’ six identified target sectors, and our entry into the sports retail segment gives us a wider reach within retail.
“One of the main factors supporting the acquisition is that via Al-Ikhsan, we have the opportunity to back a highly capable bumiputera entrepreneur with a view to transform the business into a stronger market leader with regional presence,” he added.
Established in 1993, Al-Ikhsan currently commands a 36 per cent market share in the multi-brand sports retail industry, encompassing sports equipment, apparel, and footwear with 119 outlets in peninsular Malaysia.
With its rapid growth since the establishment, the retailer recorded its highest revenue in 2012 at RM278million.
The retailer has also generated revenue of RM257million at the end of last year.
Ekuinas chief executive officer Syed Yasir Arafat Syed Abd Kadir said, the firm will be working closely with Al-Ikhsan’s founder and management team towards accelerating the local and regional expansion.
Syed Yasir said, the plans will be executed either via organic growth or through the acquisition of existing specialty players in the market to reinforce its presence in under-penetrated cities in the country, as well as entry into East Malaysia and neighbouring Asean countries.
In the statement, Ekuinas added that plans are afoot to open four new megastores in Kuala Lumpur and Perlis, as well as Al-Ikhsan premium specialty stores in cities such as Penang.
With the help of Ekuinas, Al-Ikhsan is also targeting to open six stores in East Malaysia, namely in Kuching, Sarawak and Kota Kinabalu, Sabah by 2018.
As for the Asean markets, the entry into the likes of Indonesia and Thailand are planned to take place within the next three to five years.
Al-Ikhsan founder and chief executive officer Ali Hassan Mohd Hassan said that this was yet another defining milestone in the history of his company.
“We look forward to working closely with Ekuinas and to tap into their expertise to help take us to the next level within the sports retail industry,” he added.
Together with an investment in the manufacturing sector under the Outsourced Programme for RM12million, Ekuinas has invested in a total of 36 companies under direct and outsourced investments since its establishment in 2009.