21 June 2020 20:34
Go Outdoors is said to be teetering on the brink of collapse, after the JD Sports-owned retailer was reported to be calling in administrators. JD Sports has lined up Deloitte as administrator to the company, which employs about 2,400 people across 67 stores, according to reports. Read more: JD Sports appeals CMA block on £90m Footasylum buyout Go Outdoors, which sells bikes, tents and waterproof clothes, has suffered a sharp fall in sales after the coronavirus pandemic struck. But it was struggling financially before then, booking a £291.1m loss in the six months to 3 August last year. Like all retailers which are classed as non-essential by the government, Go Outdoors was forced to close in March.
Last week, shops eventually reopened, but with limits on the number of people allowed in-store at once so as to comply with two-metre social distancing rules. JD Sports bought Go Outdoors in 2016 for £112m, but was forced to file legal notice of its intention to appoint administrators on Friday, according to Sky News. Pentland Group-owned JD Sports is expected to restructure Go Outdoors using an insolvency process, with hopes to retain control of the chain. Read more: JD Sports shares drop after top investor Pentland slims down stake It is the latest retailer to fall into trouble in the wake of the coronavirus lockdown, after Cath Kidston, Debenhams and Laura Ashley also all called in administrators in recent months. Tens of thousands of jobs have already been lost over the last few months as a result of the pandemic, with some of Britain's biggest companies including British Airways, Rolls-Royce, and British Gas owner Centrica slashing their workforce.
Reports in the national media claim that JD Sports Fashion is preparing to call in administrators Deloitte to deal with its Go Outdoors subsidiary, which currently employs around 2,300 people. This follows a sales process in which Go Outdoors canvassed for potential buyers, reports say. Go Outdoors in Chesterfield. Sign up to our daily newsletter The i newsletter cut through the noise Sign up Thanks for signing up! Sorry, there seem to be some issues. JD Sports is expected to use the insolvency process to restructure Go Outdoors, which specialises in hiking, camping, cycling and fishing equipment and clothing. Sky News reported that the Manchester-based retail group would then hope to retain control of a 'slimmed-down' Go Outdoors. Chesterfield's Go Outdoors is based at the Spires Retail Park and was officially opened by actor and investigative journalist Ross Kemp in March 2018. In December last year the Go Outdoors headquarters in Sheffield closed, costing 120 jobs. 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JD Sports, which owns Go Outdoors, filed a notice of intention to appoint administrators on Friday, the Sunday Times and BBC have reported. Shock at JD Sports By a Daily Business reporter | Broken chain: 2,400 jobs at risk JD Sports sent shockwaves through the retail sector with a report that one of the best-performing high street chains intends to appoint administrators for its Go Outdoors' chain. Go Outdoors, specialising in camping equipment, bikes and clothes, employs about 2,400 staff across 67 stores. It was acquired for £112 million by Manchester-based JD Sports group in 2016. But the chain has been struggling in recent years, and the forced closure of stores under the coronavirus lockdown is said to have further exacerbated the firm's problems. It is understood the accountancy firm Deloitte has been appointed to oversee the process, which could see the company restructured or requests made for rent cuts or "holidays" for its stores. Follow Daily Business on Facebook JD Sports also owns Tiso, the Edinburgh-based outdoor clothing and equipment company, which is not thought to be affected. Go Outdoors is understood to have run a sale process in recent weeks to canvas interest from potential buyers, according to an executive at another major retailer. Non-essential retailers have been allowed to reopen in Northern Ireland and England, but research reveals that many customers are not comfortable about returning to shops. Social distancing and the limitations on numbers allowed to enter, as well as long queues, also deters shoppers, and questions the viability of some companies. Compared with the same period in 2019, footfall was down 45.3% on the first day of reopening in England, according to retail analyst firm Springboard. The pandemic has already caused Cath Kidston to go online and Victoria's Secret and Laura Ashley to call in administrators. Poundstretcher and All Saints announced have each launched a company voluntary arrangement, an insolvency process that allows companies to continue trading while pushing through store closures and rent cuts. JD Sports 'considering administration of outdoor retail chain' JD Sports, the Bury-based sports and athleisurewear retailer, is believed to be planning to put its Go Outdoors business into administration. Weekend reports claim the group, which has a £6.3bn market value, has filed a notice of intention to appoint Deloitte as administrator. JD acquired Go Outdoor four years ago for more than £100m. The subsidiary employs around 2,400 staff. Sky News reports that 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 will use an insolvency process to create a slimmed-down Go Outdoors structure. Go Outdoors reported a loss of £291.1m in the six months to August 3, last year. If the administration process is confirmed, 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 was founded in 1998 in Sheffield by Paul Caplan and John Graham. It grew from a single store to a nationwide outdoors group with 58 stores and turnover of £202.2m, with pre-tax profits of £4.9m. Prior to the deal, JD Sports already has 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. JD Sports has declined to comment.