Super Retail Group, parent company of Rebel, will incur losses on its latest activewear acquisition until 2016/17.
In November 2015, the Group increased its ownership share of Infinite Retail, an online sports merchandise business, from 50 per cent to 95 per cent.
Following the change in ownership, the management of Infinite Retail has been integrated into Rebel with improved processes and a reduction in operating costs.
However, unprofitable contracts with sporting bodies and clubs and integration costs will result in the business incurring an EBIT loss of circa $5 million (Net of Non-Controlling Interests) in the 2015/16 year.
Infinite Retail will incur total restructuring costs of $5 million in the 2015/16 accounts, representing $3.0 million provision for onerous contracts, $1.5 million for write off of systems and $0.5 million other costs.
It will look reduce operating costs and achieve cost synergies by integrating its technology platforms with the Rebel business.
The restructure will enable Infinite Retail to contribute approximately $25 million sales at break-even EBIT to the sports division results in 2016/17.
Despite the loss, Super Retail Group reported a 9% increase in its sports retailing business for the 44 weeks to April 30.