Share deal sends stock in Rochdale fashion retailer soaring
Bury-based JD Sports Fashion has bought an 8.3% stake in Rochdale retailer Footasylum, sending shares in the business soaring by up to 80% in early trading.
JD Sports revealed earlier today that it had acquired 8,676,878 shares in Footasylum, and that it is prepared to amass up to 29.9% of its stock.
However, the group insisted that the deal is for investment purposes only, and that it is not intending to make an offer for Footasylum.
In later trading this morning Footasylum shares were priced 66.5% ahead of Friday’s close, at 48.28p per share.
This contrasts with Footasylum’s 165p share price in June last year, before it admitted it was subject to trading pressures as retailers across the UK faced problems on the high street.
Footasylum floated on the Alternative Investment Market (AIM) in November 2017.
It made Clare Nesbitt, aged 30, the youngest chief executive of a London-listed company.
She is the daughter of David Makin who, along with John Wardle, founded JD Sports. Mr Makin founded Footasylum in 2005 after selling out of JD Sports.
Footasylum operates 70 stores around the UK.
In October last year it revealed it had slumped to losses of £4m in the first six months of the year, saying it had been hit by the slump on the high street and delays in opening of new stores.
Revenues at Footasylum were up 19% to £98.6m with growth across all channels and major product categories.
Store revenues were up 12% to £66.3m, despite the impact of challenging trading conditions and delays in store openings and upsizes.
Online sales were up 29% to £30.2m, now accounting for 31% of total revenue and wholesale was up 200% to £2.1m.
However, its adjusted loss before tax was £4m compare with a profit £2.3m in the first half of the previous year.
In contrast, JD Sports announced last month that the Christmas trading period had produced an uplift in trading.
The firm said it has seen significant progress in its international development with total sales growth for the cumulative 48-week period to 5 January 2019 of 15% across global sports fashion brands.
The figures did not include the recent acquisitions of Finish Line in the US and Sport Zone in Iberia.
