JD Sports has bought its subsidiary Go Outdoors back for £56.5m in a bid to renegotiate better rents with landlords after putting the business into administration earlier this week.
The sport fashion retailer’s boss Peter Cowgill said that “as a consequence of Covid-19, Go Outdoors was no longer viable as previously structured”.
However, JD Sports has said that Go Outdoors, which operates 67 stores, could be salvaged ”if fundamentally restructured”.
JD Sports, which appointed Deloitte as administrator, said that its payment for Go Outdoors would act as “partial repayment against its historic indebtedness”, and that its intention was “to retain the majority of Go’s retail estate and preserve as many jobs as possible”.
JD has also said it will “honour the principal historic liabilities of the Go business, including branded stock suppliers, HMRC liabilities on taxation, customer returns and gift cards”.
The retailer said its primary motivation for putting Go Outdoors through a pre-pack administration process was to secure rents that were more representative of the market value of its store estate.
JD said “the terms of the property leases in Go were extremely inflexible, with the stores having an average remaining period to lease expiry of approximately 10 years with upwards only rent reviews, many of which are fixed at rates above inflation regardless of the market rent in the location”.
Cowgill said: “Having investigated all available options for the business, we firmly believe that this restructuring will provide Go Outdoors with a platform from which it can progress while remaining a member of the group. Most importantly, we are pleased that it will protect the maximum number of jobs possible.
“We look forward to having positive conversations with landlords and agreeing new flexible lease contracts, which reflect the widely reported challenges of reduced consumer footfall.”
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