Decision n ° 18-DCC-53 of April 20, 2018 relating to the acquisition of sole control of André

by the company Spartoo

RELEVANT MARKET DETERMINATION

5. The parties are simultaneously active in the retail product distribution sectors non-food (shoes
and leather goods). In each of these sectors, two categories of markets are distinguished: the
upstream markets for the supply of retail businesses with manufacturers (A) and downstream
markets, which bring presence of retail businesses and end consumers (B).

A. THE UPSTREAM SUPPLY MARKET

6. With regard to the delimitation of product markets, the decision-making practice of the
competition considers that the producers who supply the distributors cannot convert easily to the
manufacture of products other than their own. It thus distinguishes as much of markets that there
are families of products .

7. In the present case, the products purchased simultaneously by the parties from their suppliers
are shoes and leather goods. The parties consider that these products form two distinct product
families.

8. With regard to the delimitation of geographic markets, the decision-making practice of the
authorities competition considers that the markets for the supply of footwear and leather goods
are generally of global dimension .

9. In any event, the question of the exact delimitation of the upstream markets for the supply of
new non-food items can be left open in the extent to which the conclusions of the competitive
analysis remain unchanged, regardless be the selected segmentations.

B. THE DOWNSTREAM DISTRIBUTION MARKETS

1. PRODUCT M ARCHES

a) Distinction by product category

10. With regard to the retail distribution of non-food products, the competition authorities
distinguish as many markets as there are product families 3. Indeed, within each of the markets
thus defined, competition varies significantly due to the degree of specialization of a large
number of players in one or more families of products.

11. In the present case, the overlapping activities of the parties mainly concern the shoes and
leather goods

12. As regards the market for the retail distribution of shoes, the decision-making practice of the
Competition Authority has segmented the market according to the age or gender of the consumer
end (man, woman, child), and the use of shoes (indoor shoes, shoes outdoor). Within the outdoor
shoe segment, the French Competition Authority also considering distinguishing city shoes from
sports shoes

13. With regard to the market for the retail distribution of leather goods, the practice competition
authorities considered that these products constitute a segment the clothing and ready-to-wear
market

14. In any event, the exact delimitation of these markets by product category may be left open,
insofar as the conclusions of the competitive analysis remain unchanged, whatever the
segmentations used.

b) Distinction by distribution channel

15. The Competition Authority recently questioned the relevance of analyzing a merger in the
retail sector on two channels of separate distribution (distance selling or "VAD" 7, on the one
hand, and sale in physical store, on the other hand) 8 or on a global market which includes the
two distribution channels 9 .

16. In its opinion on the functioning of electronic commerce 10, the Authority of the competition
noted that traditional retail chains are adapting their strategies to take into account the growth of
online sales, by adopting a “multi-channel” distribution including a network of physical stores
and a sales site in line. According to this model, they can create their own website on which they
offer products in addition to those sold in stores (" click & mortar "), or they may create sites that
only develop their activities online (" pure player ").

17. The Competition Authority noted, however, depending on the products concerned, the
maintenance of significant differences between the VAD and the sale in physical store, in
particular in the how the players in these two distribution channels communicate and acquire
customers 11 . From the consumer's point of view, in-store purchases generally offer the
possibility to inspect the desired product and, if necessary, to benefit from the advice of a
specialist seller. In addition, the articles presented are, most of the time, available at once.
Conversely, the VAD allows you to be able to make purchases at any time of day and week,
without having to travel. The European Commission has concluded that each distribution
channel has various advantages and disadvantages, and responds to different consumer needs
12 . To date, it considers that these two channels of distribution are more complementary than
substitutab

18. In its decision relating to the acquisition of Darty by Fnac 13 , the Autorité de competition
has found that, when it comes to the retail distribution of brown and gray products, these
differences tend to be significantly reduced since the signs on both distribution channels adopt an
“omnichannel” policy. She also found that the internet has been integrated into the purchasing
behavior of French consumers. The Authority Competition concluded, after an in-depth
examination of the transaction, that the retail markets for brown and gray products now include
sales in stores and distance sales in mainland France.

19. Furthermore, with regard to the physical store sales channel, the decision-making practice of
the Authority operated a segmentation between the store formats, by distinguishing the stores
specialized and large and medium-sized stores.

20. In this case, the analysis will be carried out at the level of each product category, all
channels distribution combined (store sales and VAD), but also on separate channels VAD and
physical store distribution.

2. GEOGRAPHICAL M ARCHES

21. With regard to the non-food DVF segment, the decision-making practice of competition
authorities retain national boundaries due to differences linguistic and heterogeneity of consumer
habits within the Union European standard, as well as national cost and delivery times.

22. However, as regards the sale in physical stores of shoes and articles of leather goods, the
decision-making practice of the Competition Authority considers that the analysis must be
carried out on catchment areas at local level. She felt that for this guy consumers are ready to
drive 20 minutes by car about to go to a store.

23. Therefore, the analysis of the operation on a global market, including the two distribution
channels (VAD and in store), raises the question of its geographic dimension (national or local).
In its aforementioned Fnac / Darty decision, the Competition Authority conducted its analysis
competitive both nationally and locally. In particular, it noted that the analysis of “ the online
offer does not imply concealing the differences in local situations which can be offered to the
consumer depending on the catchment area in which he is find. Indeed, if the minority of
purchases made on the internet in the sector can be made from anywhere in the country, the vast
majority of sales are carried out in store and result from consumer arbitration carried out in
particular by function of the alternatives which are geographically accessible to it. The existence
of parameters competition premises also shows that, among the alternatives between which the
consumer referee, local offers are likely to respond to logic commercial and tariff specific to the
competitive situation.

24. In the present case, the analysis will be carried out at national and local level, in the areas of
reaches out to the points of sale of the parties.

25. The question of the exact definition of the retail markets for non-retail products new food
products, in terms of both product and geographic markets, may be left open as the conclusions
of the competitive analysis remain unchanged, whatever the boundaries chosen.
Competition analysis:- benefits v. harm

A. THE UPSTREAM SUPPLY MARKETS

26. As regards the supply of shoes and leather goods, it appears from the instruction that the
parties' combined market shares represent less than 1%, what whatever segmentation is
chosen.

27. Consequently, the transaction is not such as to affect competition on the markets
upstream of the supply of shoes and leather goods.

B. THE DOWNSTREAM DISTRIBUTION MARKETS

28 . THE RETAIL DISTRIBUTION OF SHOES 28. At the national level, the parties'
combined market shares are systematically lower at 10%, whatever the segments and the
distribution channel (VAD and global) analyzed.

29. At the local level, the parties' combined market shares are less than 25%, whatever be the
segmentations examined. In the 12 catchment areas of Spartoo stores, the the new entity will
also own less than 20% of stores specializing in the distribution of shoes.

30. This transaction is not likely to lead to horizontal effects on these markets local.

31. On the one hand, in the case of retail distribution markets, the Competition Authority
generally considers that the market share threshold from which horizontal effects are likely to
occur is 50%

32. On the other hand, the overlap of activity between the parties resulting from the
transaction is very limited since Spartoo's activity in the distribution of shoes in physical
stores is limited.

33. More generally, whatever the distribution channel examined, the new entity will be faced
with competition from major national distributors: Décathlon, Eram, La Halle, San Marina,
for retail distribution in physical stores, and Zalando or Sarenza, in terms of VAD.
Furthermore, the Competition Authority notes that the acquisition of Sarenza by Monoprix
(Casino group), authorized by a decision concomitant with this 18, will give this competitor
equivalent status to the new entity 19 which will be active simultaneously on these two
distribution channels.

34. In view of the above, the transaction is not likely to affect the compete in the retail
footwear market.
2. The A RETAIL DISTRIBUTION D ' ARTICLES OF LEATHER

35. At the national level, the parties' combined market shares are less than 6%, whatever or
the sales channel considered.

36. At the local level, the parties' combined market shares remain below 25%, which
whatever the segmentations examined.

37. Consequently, the transaction is not likely to harm competition on the retail distribution
markets for leather goods.

CONCLUSION

DECIDED Single article : The operation notified under number 17-283 is authorized.

(allowed)