Sports retailers JD and JJB in takeover talks
THE North West’s two leading sports retailers could be about to merge to create a 750 store group.
Ailing Wigan-based firm JJB Sports confirmed it is in talks with Bury-based JD Sports Fashion – which has been one of the best performers on the high street in the last three years.
JJB has a Stock Market value of £30m while JD Sports is worth more than £400m.
Both companies, which are listed on the Stock Market, confirmed the discussions were ongoing.
JJB, which has had a torrid recent history including a £31.5m emergency fund-raising on Christmas Eve, said: “JJB Sports plc confirms that it is in initial discussions with JD Sports Fashion plc in relation to a potential offer.
“The highly preliminary nature of these discussions is such that there can be no certainty that any offer will be made or as to the terms of any offer.”
JD also confirmed the talks, but added: “There can be no certainty that an offer will be made by JD Sports Fashion for JJB Sports, nor as to the terms on which any offer might be made. A further announcement will be made in due course.”
JD’s executive chairman Peter Cowgill told TheBusinessDesk.com: “It is very, very early days. Although not a competitor JJB is in our zone and we’ve noted its distress so we’re just having a little look.”
He said until the news of the talks were leaked last night, the potential deal was not at the top of his agenda: “The focus has been on our business,” he added.
After poor recent trading JJB – which nearly went into administration in 2009 – is expected to need to raise further equity to continue its turnaround under the guidance of chief executive Keith Jones, who joined last year from DSG International.
JD, which operates the Bank and Scotts fashion brands as well as the JD Sports chain, is in a strong financial position and has been looking at new markets to deliver growth.
Late last month it moved into the Republic of Ireland with a swoop for Champion Sports, a 22-strong chain. It already has a footwear chain in France, Chausport, and recently opened a JD Sports store there.
Over the festive trading period, mirroring their performance over the last two years, JD did well, with a 2.5% hike in sales, while JJB’s Christmas sales were down 16%.
