Feb 3, 2021

JD Sports swells potential deals war chest to more than £1bn

JD Sports plans to raise almost £500m in a share issue "To capitalise on acquisition opportunities" as the UK retailer pushes on with global expansion amid the pandemic. Online retailers Asos, Boohoo and Ocado all raised funds last year through share or bond issues as sales shot up during the pandemic, while recent floats such as the Hut Group, Dr Martens and Moonpig have been oversubscribed. JD last month upgraded its forecast for pre-tax profit to "At least £400m" for the year to January 30, sharply higher than market expectations of £295m. Having built a strong position in the UK athleisure market since the early 2000s, JD Sports began to expand outside of Europe in 2015, and in 2018 acquired Finish Line in the US, the first of several acquisitions in the world's most important athleisure market. Its most recent move was the $495m acquisition of DTLR Villa, a sportswear retailer on the US east coast, announced just two days ago. The implied proceeds of the placing, combined with net cash of £1bn prior to the DTLR Villa acquisition and a £700m revolving credit facility suggest that it has the firepower to consider substantial acquisitions.

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