Go Outdoors files Notice of Intention to appoint Administrators
The directors of the Go Outdoors retail chain have filed a Notice of Intention to appoint Administrators.
It follows speculation over the weekend that parent group JD Sports Fashion was considering putting the subsidiary into administration.
It was reported JD was considering appointing Deloitte as administrator.
However, in a market update this morning Bury-based JD, which acquired Go Outdoors for £112m four years ago, clarified the situation, saying: “The group can confirm that it has considered a number of strategic options for Go and that Go’s directors have lodged the Notice in Court.
“This Notice creates an immediate moratorium around the company and its property which lasts for 10 business days.
“During this moratorium, Go’s creditors cannot take legal action or continue with any existing legal proceedings against the company without the Court’s permission.
“Administrators have not yet been appointed and the group will make no further comment at this time.”
Go Outdoors was founded in 1969 as Sheffield’s Camping and Caravanning Centre before being purchased and rebranded in 1998 by Paul Caplan and John Graham.
The business employs around 2,400 staff.
In weekend reports Sky News said Go Outdoors was touted for sale recently to gauge interest from potential buyers.
Go Outdoors boasts 67 outlets, specialising in camping, fishing and cycling equipment.
It is believed JD Sports could use an insolvency process to create a slimmed-down Go Outdoors structure.
In the six months to August 3, last year, the loss, after exceptionals, for the outdoor division was £45.2m, of which Go was £40.0m.
If administrators are appointed, Go Outdoors would be one of the latest major retailers to enter an insolvency process since the coronavirus pandemic swept across the world.
Other casualties include Oak Furnitureland, Allsaints and Poundstretcher, Debenhams and Laura Ashley.
In April Go Outdoors temporarily rebranded as Go Indoors in support of the NHS and Government coronavirus effort.
JD Sports Fashion’s £112m acquisition of Go Outdoors was approved by the Competition and Markets Authority in May, 2017.
The deal, including £16m of net debt was originally signed the previous November.
Go Outdoors grew from a single store in 1998 to a nationwide outdoors group with 58 stores, turnover of £202.2m, and pre-tax profits of £4.9m.
Prior to the acquisition deal, JD Sports already had a significant interest in the outdoors market through its Blacks, Millets, Ultimate Outdoors and Tiso businesses and the acquisition made it the London Stock Exchange’s biggest sports goods retailer.
Russ Mould, investment director at Manchester-based investment platform, AJ Bell, said: “JD Sports-owned Go Outdoors should have been a beneficiary from the current restrictions on forms of travel.
“There is likely to be a boom in staycations this year and camping trips could be the solution to many people seeking to get away from the confines of their home without having to get on a plane. That should have been a tailwind for Go Outdoors’ tent sales.
“The push for more people to cycle to work rather than use public transport should have also driven the retailer’s bike sales.
“Sadly, the timing of these tailwinds might have come too late. Closure of Go Outdoors’ stores during lockdown will have been negative for sales, despite it also having some support in the form of online operations, compounding a pre-pandemic problem that the business was already struggling.
“JD Sports probably had good intentions to grow the business when it bought the company for £112m in 2016. It now looks as if the acquired business hasn’t been given enough attention, effectively taking a back seat while JD concentrated most of its effort on its shoes and athleisure empire.
“JD has been exploring its options with regards to the business, yet it seems likely this could be yet another retail operation to go into administration.”