According to recent reports, the retail group JD Sports is reportedly engaged in discussions regarding the possible sale of a number of its brands that fall under the category of fashion and beauty as the company shifts its focus to business models that are more focused on sports and outdoor activities.
According to Drapers, a source said that the company, which owns brands such as Tessuti, Size?, and Go Outdoors, is possibly considering selling some of its acquired brands that don’t fit with its strategy back to their previous owners or offering them to the market. The company is the owner of brands such as Tessuti, Size?, and Go Outdoors, among other brands. Another person who spoke to the publication, “[JD] has been mopping up brands in difficulty over the past few years.” When you look at its portfolio, you’ll see that it’s quite extensive. However, if they do not contribute to the company’s bottom line, they will be regarded as a burden.
Drapers mentioned that JD Sports had not provided a response to a request for a remark on the issue. Peter Cowgill, a previous chairman of the company, was responsible for putting into action the company’s initial acquisition-focused strategy. The businessman resigned from his position in the company in May 2022 as a result of disagreements with poorly considered acquisitions and substantial bonus payments. He was succeeded in August by Régis Schultz, a former executive of B&Q. On the other hand, it was disclosed this week that Cowgill will be returning to the company in the capacity of a consultant according to a contract arrangement.
It is anticipated that the retail group will pay him more than five million pounds, and there will be limitations placed on his ability to collaborate with other JD employees and competitors.
The sportswear retailer has announced that its pre-tax profits have decreased by 18 percent year-on-year to a total of 298.3 million pounds from February to July 30, despite seeing an increase in sales of 13.7 percent during that time period. This information comes in conjunction with the potential offloading talks.
In addition, at the presentation of the company’s interim results, JD Sports non-executive chair Andrew Higginson issued a warning about the “cautious” view for the latter part of the year. The primary reasons given by Higginson for the issuance of the cautionary statement were “widespread macroeconomic uncertainty” and “inflationary pressures.”
Reference:
Douglass, Rachel. “JD Sports Reportedly Considering Offloading Brands to Focus on Sports Model.” FashionUnited, https://fashionunited.com/news/business/jd-sports-reportedly-considering-offloading-brands-to-focus-on-sports-model/2022092649852.
