Now JD Sports sets sights on South Korea with 50/50 JV
Sports fashion retailer JD Sports has invested £5.5m in acquiring a 15% stake in a South Korean footwear retailer, with plans to buy a further 35% next year.
The Bury-based business has entered a joint venture with South Korean footwear retailer Shoemarker Inc, for J&S Partners Inc – a company owned by Shoemarker, which trades as Hot-T.
Hot-T is a multibranded sports footwear retailer with 23 stores in South Korea and its own website. It has an annual turnover of around £17.2m but had pre-tax losses of £4.2m, which the company said related to one-off stock write-offfs.
JD has acquired an initial 15% of Hot-T for £5.5m, with the option to acquire a further 35% share of Hot-T following the finalisation of Hot-T’s accounts at the end of December.
JD said it does intend to exercise this option, at which point it would rebrand the Hot-T stores as JD.
The exercise of this option would also meqan Hot-T’s results and net assets would be consolidated into JD’s accounts, although the business would continue to be operationally run by its existing management team.
Peter Cowgill, executive chairman of JD Sports, said: “We are delighted to be entering into this JV which gives JD the opportunity to enter a new market of over 50 million people with a proven operator. This JV will further strengthen JD’s global presence.”
The deal is hot on the heels of yesterday’s announcement that the company had exchanged contracts to combine its existing business in Spain and Portugal with one of the largest sports retailers in the region.
That deal will see it combine JD Sprinter Holdings, its Spanish and Portugese business, with the Sport Zone business of Sonae, a Portuguese based multinational corporation that manages a portfolio of businesses across a range of sectors.
They have an estimated combined turnover of more than €450m and a store network of 311 stores (204 of which are in Spain and 107 are in Portugal).
JD Sports posted another record half year result earlier this week, with pre-tax profits up 33%, as its outdoor business posted a positive half year profit for the first time.
It increased its half year pre-tax profits to £102.7m on a turnover of £1.37bn for the half year to July 29.
This continued strength is being complemented the group’s international growth – it opened 23 stores across mainland Europe, as well as its first in Australia.
