Ekuinas takes up 35% in sportswear retailer Al-Ikhsan

At the signing ceremony between Ekuiti Nasional Bhd (Ekuinas) and Al-Ikhsan Sports Sdn Bhd. From left: Ekuinas chief executive officer Syed Yasir Arafat Syed Abd Kadir and Al-Ikhsan founder Haji Ali Hassan Mohd Hassan.

KUALA LUMPUR: Ekuiti Nasional Bhd (Ekuinas) has made its maiden venture into the retail sportswear segment by acquiring a 35% stake in the country’s leading bumiputra sportswear retailer, Al-Ikhsan Sports Sdn Bhd, for RM68.6mil. 

The deal -- its first investment for 2016 -- also includes the 100% acquisition and injection of the company’s homegrown sportswear apparel brand, AL Sports, under the Al-Ikhsan umbrella, the Government-linked private equity fund management company said in a statement.

Thus is to leverage on the increasing interest in health and fitness among Malaysians in general. 

“Branded sportswear retail sales in Malaysia are poised to grow 8% annually to reach RM2bil by 2020, while in neighbouring countries such Singapore, Indonesia and Thailand, it is expected to grow past the RM13bil mark in the same period,” Ekuinas said. 

It said that with Al-Ikhsan’s market leading position in multi-brand sports retail in Malaysia (with over 100 outlets across Peninsular Malaysia) and also one of the largest in the region, it was well placed to capitalise on this trend.

Commenting on the investment, Ekuinas chairman Raja Tan Sri Arshad Raja Tun Uda said: “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. This acquisition extends the retail portfolio beyond our existing investments in food and beverages.

“One of the main factors supporting the acquisition is that via Al-Ikhsan, Ekuinas has the opportunity to back a highly capable bumiputra entrepreneur with a view to transform the business into a stronger market leader with regional presence.”

Established in 1993 by Ali Hassan Mohd Hassan, Al-Ikhsan today commands a 36% market share in the multi-brand sports retail industry encompassing sports equipment, apparel and footwear with 119 outlets in Peninsular Malaysia.

Al-Ikhsan stocks 30 sporting brands including Nike, Puma and Adidas. With its rapid growth since 1993, Al-Ikhsan recorded its highest revenue in 2012 at RM278mil. At end 2015, Al-Ikhsan generated a revenue of RM257mil and a normalised Ebitda (earnings before interest, taxes, depreciation, and amortisation) of RM23.2mil.

Ekuinas chief executive officer Syed Yasir Arafat Syed Abd Kadir said the private equity firm would work closely with Al-Ikhsan’s founder and management team towards accelerating the local and regional expansion, either via organic growth or through the acquisition of existing speciality players in the market to reinforce its presence in under-penetrated cities in Malaysia, as well as entry into East Malaysia and neighbouring Asean countries.

Plans are afoot to roll out four new megastores in Kuala Lumpur and Perlis. Consumers in cities such as Kuala Lumpur and Penang can also look forward to Al-Ikhsan premium speciality stores in the mid to long term. 

With Ekuinas’ support, Al-Ikhsan is also setting its eyes on the Sabah and Sarawak markets with plans to open six stores in Kuching and Kota Kinabalu by 2018. Regional plans at this point include the entry into other Asean markets, namely Indonesia and Thailand within the next three to five years.

Al-Ikhsan founder and chief executive officer, Tuan Haji 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. We are confident that our partnership will prove mutually rewarding for both entities, as well as provide Malaysians another source of pride as we grow the Al-Ikhsan and AL Sports brands beyond our shores,” Tuan Haji Ali said. 

Together with an investment in the manufacturing sector under the Outsourced Programme for RM12mil, Ekuinas has invested in a total of 36 companies under direct and outsourced investments since its establishment in 2009.