- JD Sports files a notice of intention to appoint administrators for its Go Outdoors brand.
- Go Outdoors operates 67 stores in the United Kingdom, with a workforce of 2,300 people.
- Cath Kidston closed all of its 60 UK stores resulting in 900 workers losing their jobs in May.
JD Sports Fashion (LON: JD) said on Monday that it is exploring multiple options for its struggling brand, Go Outdoors. Specialising in cycling, fishing, and camping gear, Go Outdoors came under JD’s umbrella in 2016. Owing to the sharply expanding loss in this business, however, JD announced to have started legal proceedings to appoint administrators for Go Outdoors on Monday.
Shares of the company were reported 2% down in premarket trading on Monday. At 633 pence per share, JD Sports is roughly 25% down year to date in the stock market after recovering from a low of 293 pence per share in March. Learn more about how to choose winning stocks.
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Sky News says JD will appoint Deloitte as an administrator
The sportswear retailer confirmed on Monday that its directors had approached a British court to submit a notice of intention. The administrators, it added, are yet to be appointed. Go Outdoors currently operates 67 stores in the United Kingdom, with a workforce of 2,300 people.
In a report on Saturday, Sky News had first revealed that JD’s notice of intention suggests that its Go Outdoors brand is expected to enter administration in the upcoming days with Deloitte serving as an administrator. In a statement on Monday, JD said:
“This notice creates an immediate moratorium around the company and its property, which lasts for ten business days. During this moratorium, Go’s creditors cannot take legal action or continue with any existing legal proceedings against the company without the court’s permission.”
Cath Kidston closed its UK stores in May
Go Outdoor has struggled with sales in recent months as the Coronavirus pandemic that has so far infected more than 3 million people in the UK and caused over 42,500 deaths restricted people to their homes. Monday’s news adds to a significant number of high street jobs that have been jeopardised by the pandemic. Earlier this year in May, Cath Kidston had also closed all of its 60 stores in the UK that had resulted in 900 workers losing their jobs.
The ongoing health crisis pushed Go into temporarily shutting down its countrywide stores in April. Despite resuming operations in early May, sales figures failed to improve for the retailer as COVID-19 kept campsites closed and hindered outdoor activities.
At the time of writing, JD Sports Fashion has a market cap of £6.17 billion and a price to earnings ratio of 23.91.