UK: JD Sports to buy Blacks Leisure in GBP20m deal
The deal comes just days after Blacks said it would go into administration as part of plans to sell the business. The pre-pack arrangement let JD Sports cherry-pick the company's best assets.
JD Sports said it will retain Blacks' senior management team, led by chief executive Julia Reynolds.
"Following the elimination of of any underperforming stores and other cost reduction initiatives we believe the business can be run successfully as independent fascias within the group," it said.
The company said that given that the acquisition has been completed at the quietest trading point fo the year and with low current stock levels, it anticipates that the deal will lead to a minor reduction in earnings for the remainder of the financial year.
Beyond this, the earnings impact of Blacks will depend on how quickly it can deal with the store portfolio, rejuvenate the offer and realise cost reductions.
"We are delighted to add another leading multi-branded retail proposition to our portfolio of retail businesses. We believe with the support of JD's operational disciplines and financial strength, along with the existing Blacks management team, we can restore the Blacks business to a profitable market leading position," said JD Sports executive chairman Peter Cowgill.
Blacks Leisure put itself up for sale in early December after warning that it was unlikely that to be able to raise the additional funding to carry out its strategic plans.
Retailer JD Sports Fashion recorded a 1.5% increase in like-for-like sales in the 19 weeks to 9 June, but margins came under pressure as offers continued to drive the market....
UK sportswear retailer JD Sports has seen its full-year pre-tax profit hit by its acquisition of Blacks Leisure, the UK's largest outdoor clothing and equipment retailer, earlier this year....
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