JD Sports takes a 60% stake in Poland’s MIG to enter central and eastern European markets

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Mar 12, 2021
  • JD Sports takes a 60% stake in MIG to enter central & eastern European markets.
  • The sports fashion retailer raised £464 million via equity issue in February.
  • JD Sports is looking for a distribution centre in Germany or the Netherlands.

JD Sports Fashion plc (LON: JD) said on Friday that it will take a 60% stake in Poland’s Marketing Investment Group (MIG) – a move that will pave the way for Britain’s largest sportswear retailer to enter the central and eastern European markets.

JD Sports shares that you can conveniently trade online via the apps opened at 823 pence per share on Friday and are currently trading 826 pence per share after touching an intraday high of 832 pence per share. In comparison, the stock had started the year 2021 at a much lower per-share price of 539 pence.

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The news comes only a month after JD Sports further expanded its footprint in the United States with a £355.76 million acquisition of Baltimore-based DTLR Villa LLC.

JD Sports raised £464 million via equity issue in February

JD Sports opted for an equity issue to raise £464 million last month. Ever since, the company was actively in pursuit of acquisitions. MIG has a strong presence in central and eastern Europe, where it operates 410 retail stores across nine countries.

Peel Hunt analysts commented on the acquisition on Friday and said:

“It gives JD a foothold in interesting growth markets, and we would expect flagship stores to follow in big cities.”

In its announcement on Friday, JD also said that MIG generated roughly £200 million of revenue in the recent financial year. The Krakow-based company that owns prominent retail chains, including Sizeer and 50 Style, deals primarily in sports fashion apparels, footwear, and accessories from several global brands.

JD refrained from divulging financial details of its agreement with MIG on Friday.

JD Sports is looking for a distribution centre in Germany or the Netherlands

In February, Executive Chairman Peter Cowgill said that JD Sports was searching for a distribution centre located in the EU in a bid to avoid post-Brexit tariffs. The deal with MIG, as per JD spokesman, fails to provide sufficient warehouse capacity to serve the aforementioned purpose. JD Sports, therefore, is still looking for a site located in Germany or the Netherlands.

The British sports fashion retail company had purchased US-based Shoe Palace for £244 million in December.

JD Sports performed only slightly upbeat in the stock market last year with an annual gain of close to 6%. At the time of writing, the Bury-based company has a market cap of £8.51 billion and a price to earnings ratio of 42.35.

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