Having put Go Outdoors into administration with Deloitte this week, JD Sports has opted to reacquire the business for £56.5 million.
Deciding that the outdoor retailer, which employs around 2,400, does indeed have a future, a major restructuring is now mooted. It is reported that the majority of the 67 branches will survive and as “many jobs as possible” will be preserved.
Peter Cowgill, executive chairman at JD Sports commented on the arrangement: “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 while remaining a member of the group.”
It is expected that the business will now seek to reorganise its property leases, which “were extremely inflexible” and likely only to be revised upwards in cost.
JD Sports first bought Go Outdoors four years ago for a price of £100 million.
Initially a sale of the business was apparently considered, though the parent group, with its £6.3 billion market valuation, has opted to give Go Outdoors a second chance at success via what is known as a pre-pack administration deal.