JD Sports buys back Go Outdoors from administrator as it looks to restructure leases

Go Outdoors has been swiftly bought out of administration by its former owner JD Sports for £56.5 million as it looks to restructure the business with new lease arrangements.

The deal comes after JD Sports sought to sell the business in May but failed to find a buyer, which led to it being placed in administration last week after its poor financial position was put into stark relief when Covid-19 hit.

JD Sports highlighted the unsustainable status of Go Outdoors as a result of “extremely inflexible” leases that had an average period remaining of 10 years, with upward-only rent reviews, many of which were fixed at rates above inflation regardless of the market rent in the location. The plan is to retain all 67 stores and continue trading from them as long as JD Sports can agree more realistic, flexible leases with landords.

“As a consequence of Covid-19, Go Outdoors was no longer viable as previously structured and would have absorbed capital at an unsustainable rate for the foreseeable future,” said Peter Cowgill, executive chairman of JD Sports.

“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 whilst 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.”

The lockdown from Covid-19 pushed Go Outdoors into particular difficulty, according to Jonathan Pritchard, analyst at Peel Hunt, who said the company “does not have a powerful website” as a result of suppliers historically delivering goods to its individual stores. This led to overall company sales being massively down after lockdown. 

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