- Huw Hughes |
JD Sports has announced that it has bought back its Go Outdoors brand from administrators in a pre-pack deal worth 56.5 million pounds.
The deal will initiate a restructuring which aims to “preserve as many jobs as possible” and retain “the majority” of Go Outdoors’ stores.
The news came in the same announcement that Deloitte had been appointed as administrators for the struggling camping and hiking gear specialist. At that point, Go Outdoors operated 67 standalone stores and a trading website.
The company said Go Outdoors has been hit hard by the Covid-19 pandemic and subsequent store closures and said that its property leases were “extremely inflexible”.
JD Sports buys Go Outdoors in pre-pack deal
“Such factors have resulted in the board deciding that it is not in the best interests of the wider group, and its shareholders, to provide continued financial support to Go in its existing form,” the company said.
Go Outdoors was struggling even prior to the outbreak, reporting a 40 million pound loss in the six months to 3 August 2019.
JD Sports added that it had considered a number of other options, including putting Go Outdoors up for sale, but ultimately determined that, “if fundamentally restructured”, the retailer had a future in the group.
“As a consequence of Covid-19, Go Outdoors was no longer viable as previously structured and would have absorbed capital at an unsustainable rate for the foreseeable future,” executive chairman Peter Cowgill said in a statement. “Having investigated all available options for the business, we firmly believe that this restructuring will provide Go Outdoors with a platform from which it can progress whilst remaining a member of the Group. Most importantly, we are pleased that it will protect the maximum number of jobs possible.”
Cowgill continued: “We look forward to having positive conversations with landlords and agreeing new flexible lease contracts which reflect the widely reported challenges of reduced consumer footfall.”
JD Sports is expected to report its full-year results on 7 July.
Images courtesy of JD Sports/Silverburn