Sustaining Growth Through Constant Innovation — Sportmaster of Alexander Mikhalsky

Alexander Ivanovich Mikhalsky got an engineering job fresh out of college in 1985. Over the following years, he gained practical experience in management and business operations. Not long after, he teamed up with his former classmates Nikolay and Vladimir Fartushnyak to start an import company that soon reoriented itself toward sports equipment. The exclusive deal with Kettler, the German premium sports equipment manufacturer, enabled them to open the first franchised Kettler Sport store in Moscow in 1995.

Alexander Mikhalsky Helps Found Sportmaster

The experience Mikhalsky and his partners had with sportswear confirmed their belief that the Russian market was underserved at the time. Even regional capitals lacked higher-end sports stores, so when Sportmaster was founded in 1997, its goal was to fill this market gap. The first store under the new name opened in the Russian capital that same year, and it offered everything sports-related in a single place. Both amateurs and professional sportsmen would find the clothes and equipment they needed in this hypermarket.

The expansion of Mikhalsky Alexander’s Business

One of Sportmaster’s first business goals was rapid store expansion. During the mid-2000s, they worked diligently to reach a triple-digit number of stores. Ultimately, their network would boast more than five hundred stores across 230 cities. The strategy Alexander Mikhalsky helped develop was simple, yet brilliant: turn Sportmaster’s locations into go-to places for sportswear in a given city and the region that gravitates toward it. In the long run, this strategic approach to expansion would pay off multifold.

Developing Sportmaster’s In-House Labels

Another innovation was the assortment of brands themselves. Since the founders had experience with exclusive distribution deals, they understood the importance of offering a wide range of well-known products to their customers. Over time, the complete list of brands grew to nearly 300.

In parallel, the company had been developing its own private labels. The accent was on affordable, yet good-quality leisurewear that would get more people into sports. They started with in-house brands such as Funday and O’stin and further added Demix and Nordway. 

Transforming a Retail Business into a Digital Ecosystem

A loyal customer base and an elaborate logistics network placed Sportmaster in a favorable spot when e-commerce took off in Russia in the 2010s. The digital transformation involved turning brick-and-mortar stores from simple points of sale into pickup locations. They would become incorporated into a digital ecosystem that didn’t just sell sportswear; it sold sports in general.

Sportmaster’s website and app offered training sessions with fitness experts, activity tracking apps, industry newsletters, and much more, all free of charge. Complete with horizontal integration, these amenities increased both customer retention and brand awareness, as Sportmaster didn’t rely solely on foot traffic to bring in revenue.

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