JD Sports offers £20m for Blacks assets
UK sportswear firm JD Sports Fashion has confirmed it is close to acquiring “certain assets” of retailer Blacks Leisure.
JD, whose largest shareholder Pentland owns outdoor brands Berghaus and Brasher, has reportedly offered £20 million for the majority of the 300 Blacks and Millets stores and will retain many of Blacks’ 3,500 staff. However, it is not expected to want the company’s warehouse and head office.
JD confirmed it is in advanced discussions over an offer for certain assets and said a further announcement would be made on conclusion of the talks. The deal is likely to be as part of a pre-pack administration, when a company emerges under new ownership following a pre-arranged sale.
Retail analyst Freddie George, of Seymour Pierce stockbrokers, said he was unconvinced by the merits of the proposed deal. He is concerned about the overlap between JD and stores in the Millets estate and that the group will end up having more than 800 outlets in the UK.
It has bought three chains in the last nine months – including Cecil Gee in the UK – and the performance of its other recent acquisitions, the fashion chains Bank and Scotts, has been underwhelming, according to Mr George.
He added: “We believe that there has been significant pressure from Pentland, which owns 65% of JD and is the owner of the Berghaus brand, to acquire Blacks.”
