Frasers Group’s acquisition spree shows no signs of stopping.
JD Sports Fashion Plc on Friday said it sold 15 fashion brands to fellow British retail group Frasers Group, owner of nameplates including Jack Wills, House of Frasers, Sofa.com and Flannels.
“JD is rightly recognized for its laser focus on the customer and we are convinced that the most significant opportunities lie in the continued international development of the group’s global sports fashion businesses,” JD CEO Régis Schultz said of the 47.5 million pounds ($57.9 million) deal. “We are pleased to have agreed the sale of these attractive, but non-core, brands and I would like to express my sincere thanks to all colleagues at the businesses which form part of the transaction for their hard work and contribution to the group over the years.”
Frasers Group acquired the brands Base Childrenswear, Choice, Clothingsites (including Brown Bag Clothing), Cricket, Giulio, Kids Cavern, Missy Empire, Nicholas Deakins, Pretty Green, Prevu Studio, Rascal Clothing, Tessuti (including Xile), Scotts, Watch Shop and Topgrade Sportswear (including Get The Label). It acquired the shares held by JD and and now is responsible for the brands’ debt obligations.
The share swap was immediate for eight brands while the remaining seven will be fully acquired early next year.
Now that it’s free of these businesses, JD said it can focus more fully on the opportunities across its portfolio, particularly the international and digital expansion of its core premium sports fashion brands, including names such as DTLR, Footpatrol and Finish Line.
This divestment will result in JD Sports recognizing an approximately 100 million pound ($121.8 million) non-cash exceptional charge in its annual accounts for the period to Jan. 28, 2023.
JD’s interim first-half results through the end of July showed an 18.2 percent drop in profit before tax to 298.3 million pounds ($342.2 million) in the year-ago period. Former chairman and CEO Peter Cowgill left the company in May after British regulatory authorities fined the retailer 4.3 million pounds ($5.8 million) upon finding that Cowgill violated an interim order related to JD’s banned Footaslyum deal. Additionally, the Competitions and Markets Authority leveled price-fixing allegations against JD because of the “level and timing of discounts” of some Rangers-branded apparel toward the end of the 2019 football season, which was also under Cowgill’s tenure. JD said it would recognize a 2 million pound ($2.3 million) charge for the 52 weeks ended Jan. 29, 2022, including legal fees.
Frasers appears to be on an acquisition binge, having increased its investment in Hugo Boss and Asos, as well as acquiring the bankrupt Sneakerboy and Missguided this year. In September, Frasers Group got snubbed by Australian online fashion marketplace MySale, which rejected a 13.6 million ($16.2 million) cash offer from the group for the shares it didn’t already own.
The Antigua parent reported on Dec. 8 that its group revenue increased by 12.7 percent, largely due to acquisitions. Its premium lifestyle revenue increased by 24.7 percent, primarily because of new Flannels stores and continued growth online. Excluding acquisitions, revenue increased by 22.2 percent. The reported profit before tax was 284.6 million pounds ($345.6 million), up 53 percent, reflecting continually improving product choices in its core UK businesses. Its reported after tax was up 52.8 percent from 143.7 million pounds ($174.5 million) to 219.6 million pounds (roughly $266.7 million).