JD Sports and Sport Zone combo takes a step forward
JD Sports Fashion is moving ahead with its plan to radically boost its business in Spain and Portugal with the memorandum of understanding with local retail giant Sonae that it announced in March having now turned into a concrete exchange of contracts.
This means the combination of JD's stores across Iberia with Sonae’s Sport Zone business in Portugal, Spain and the Canary Islands.
The firms exchanged conditional contracts on Tuesday to combine JD’s local unit, JD Sprinter Holdings (JDSH), with the Sport Zone business, which is one of the largest sports retailers in the area.
As part of the transaction, JD will also purchase a number of shares in JDSH from Balaiko Firaja Invest, the investment vehicle for the current minority family shareholder in the operation.
With an estimated combined turnover in excess of €450m and a store network of 311 locations (204 of which are in Spain and 107 in Portugal), JD with Sport Zone will become the second largest Iberian Sports Retailer and “will generate further scale, momentum and resources to continue the current growth” in the two countries.
JD said it will be able to draw on the experience and expertise from both the Sonae and JDSH management teams, “to create an effective and efficient retailer” and that there is “significant potential for accelerating growth and streamlining the organisational structure.”
The existing management teams “will play a key role in the future strategic and operational management of the combined business.”
Following completion, JDSH will have as shareholders JD, Sonae and Balaiko with shareholdings of approximately 50%, 30% and 20%, respectively.
JD’s executive chairman Peter Cowgill said Sport Zone is very complementary to the firm’s existing businesses in Iberia.
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