Wednesday, February 28, 2024

    JD Sports agrees £47.5m sale of 15 brands to Frasers Group

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    Mike Ashley’s Frasers Group has snapped up a basket of 15 brands including former Oasis frontman Liam Gallagher’s Pretty Green and 1980s brand Tessuti in a £47.5m cash deal with JD Sports.

    JD, which owns Size?, Finish Line in the US and Spain’s Sprinter as well as its main retail chain, said the sale of the “non-core” brands would allow it to focus on other priorities, particularly the “international and digital expansion of the group’s core premium sports fashion” retail brands.

    The deal will put the brand that Gallagher founded in 2009 in new hands for the second time in three years after Pretty Green fell into administration in 2019 before being rescued by JD. Other labels included in the sale are footwear brand Nicholas Deakins, the casual fashion brand Scotts, Rascal Clothing and Watch Shop.

    The deal, which will result in an £100m one-off non-cash writedown in JD’s accounts related to the value of the brands, is a first bold move by new chief executive Régis Schultz who took on the job in September after the departure of the group’s long-term boss Peter Cowgill.

    Schultz said: “JD is rightly recognised for its laser focus on the customer and we are convinced that the most significant opportunities lie in the continued international development of the Group’s global sports fashion businesses.”

    Ashley’s retail empire has a long history of buying up fashion brands to help bolster profits in its retail empire. Frasers already owns dozens of brands including Everlast, Lonsdale, Karrimor, Agent Provocateur and Firetrap and recently acquired tailoring brand Gieves & Hawkes and online fast fashion specialists Missguided and I Saw it First. It also has large stakes in listed luxury brands Hugo Boss and Mulberry.

    Frasers’ finance director Chris Wootton said last week that investors should “expect more deals to happen” and the group was in talks with a number of potential targets.

    However, a deal with JD would have been unlikely under leadership of Cowgill, who had a long history of rivalry with Sports Direct founder Ashley, who once owned shares in JD.

    Cowgill had hinted, for example, that the competition regulator’s block on JD’s attempt to buy smaller rival Footasylum had been influenced by the Sports Direct founder.

    Cowgill quit JD with immediate effect in May just months after the retailer was fined more than £4m for breaching the competition regulator’s rules with clandestine meetings with a takeover target.

    He has since, however, agreed to provide advice to its, new chair, Andy Higginson, and Schultz, for an “expected period” of three years under a £5.5m golden goodbye deal.

    His exit was a major blow to the company, where he oversaw a turnaround in fortunes after returning as chair three years after quitting as finance director in 2001.

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