JD Sports Fashion Plc has filed a notice to appoint administrators to its specialist camping division Go Outdoors.
In a statement today (22 June), JD Sports said it can confirm that it has considered a number of strategic options for the chain and that Go’s directors have lodged a notice of intent with the court.
“This notice creates an immediate moratorium around the company and its property which lasts for ten business days. During this moratorium, Go’s creditors cannot take legal action or continue with any existing legal proceedings against the company without the court’s permission,” JD Sports said.
The retailer added, however, administrators have not yet been appointed.
The news follows reports this weekend that JD Sports was preparing to appoint administrators to the Go Outdoors business, which it acquired in 2016 in a deal worth GBP112m (US$139m).
The chain, which specialises in camping, bikes, and outdoor pursuits equipment and clothing, is understood to employ about 2,300 staff and to trade from 67 stores across the UK.
Greg Lawless, analyst at Shore Capital, notes: “In our view, the recent lockdown from Covid has heaped additional pressure on non-essential retailers like Go Outdoors with the stores temporarily closed for the last few months and only starting to reopen last week. The Go Outdoors division has been struggling in recent years and the administration process will accelerate any restructuring. This could include store rental holidays or rent cuts across the portfolio.
“Like many general retailers, Go Outdoors has been hit by higher operating costs including rising business rates and property rents in recent years. Given the Covid pandemic the company is now looking to restructure the division to make it more sustainable and the administration process allows it the optionality to restructure the store portfolio. There have been a number of recent retail administrations including Cath Kidston, Laura Ashley, and All Saints with potentially further retail fallout to come.”
JD Sports saw its proposed takeover of Footasylum blocked by the UK competition watchdog last month. The Competition and Markets Authority (CMA) said the deal would lead to “substantial lessening of competition nationally” and leave shoppers with fewer discounts or lower quality customer service.