JD Sports buys back Go Outdoors for £56.5m via pre-pack deal
JD Sports has bought back its Go Outdoors retail business after it was placed into administration due to the impact of the Covid-19 crisis.
The sportswear retailer appointed Michael Magnay and Daniel Butters of Deloitte as joint administrators to Go Outdoors yesterday before acquiring the business for £56.5 million via a newly incorporated subsidiary JD Newco.
JD Sports said Go’s future viability had become “materially uncertain” after the enforced closure of stores during lockdown brought the company’s operating costs, particularly property leases, into sharper focus. It added: “The terms of the property leases in Go were extremely inflexible with the stores having an average remaining period to lease expiry of approximately 10 years with upwards only rent reviews, many of which are fixed at rates above inflation regardless of the market rent in the location.”
At the point of administration, Go operated 67 standalone stores and a trading website. JD said it intends to retain the majority of Go’s retail estate and preserve as many jobs as possible subject to flexibility in future leases being achieved.
All pre-existing Go employees will transfer across to the new business with their previous terms and conditions of employment preserved.
Peter Cowgill, JD Sports executive chairman, said: “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. 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.
“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.”
