JD Sports’ Go Outdoors takeover under scrutiny
JD Sports have a stranglehold on the sports-fashion retail market in the UK, with their outlets in high streets and shopping centres across the region providing people with high quality sporting and leisure brands. Now, as they look to continue their growth, the UK’s competition watchdog is looking at their proposed takeover of Go Outdoors.
The company, which was founded in 1981 and is currently based in Greater Manchester, agreed a £128.3 million takeover of Go Outdoors late last year, which looked to cement their place as the ‘country’s largest tent and camping equipment retailer’.
The reason for the scrutiny from the UK’s competition watchdog seems to be related to the fact that JD Sports already own Blacks, Milletts and Ultimate Outdoors, which all sell similar hiking and outdoor equipment. There is clearly a concern that this takeover of Go Outdoor’s 58 UK outlets could narrow the market too much.
The Competition Markets Authority (CMA) have said that they will investigate the deal between the two companies. This means that whilst the investigation is on-going, JD Sports have to cease any work they are doing to integrate the two companies.
The Telegraph have quoted Nick Bubb, an independent retail analyst as saying: "the CMA is notoriously picky and the issue is presumably that JD is controlled by Pentland (which owns outdoor sports brands like Berghaus and Ellesse) and that JD has a small chain called Ultimate Outdoors, where there may be site overlap with Go Outdoors."
In the 53 weeks to 31 January 2016, Go Outdoors, who are headquartered in Sheffield, posted revenues of £202.2 million, with a pre-tax profit of £4.9 million.
Speaking at the time of the deal, Peter Cowgill, chief executive of JD Sports, said: “Go Outdoors is a great addition to our existing outdoor business. The minimal overlap in store locations and their out-of-town, one-stop retailer approach complements the work we have done on the high street with Blacks and Millets … I am excited by the future prospects this holds for the JD group.”
The sports retail firm have seen a boost to their sales in recent years as the athletic/leisure fashion trend has seen more people than ever picking up their trainers and clothes.
Dominion holds JD Sports in its Global Trends Ecommerce Fund.
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