JD Sports Fashion Plc intends to take its first acquisitive steps in fulfilling its growth ambitions, as set out at the Capital Markets Event in February 2023. The Group is also reviewing its options to simplify the shareholdings in several of its subsidiary businesses across Europe to accelerate the development opportunities that exist for the JD fascia.

“We said at our recent Capital Markets Event that this was the start of a new, distinct chapter in the growth story of JD,” explained company CEO Régis Schultz. “The exciting developments we are announcing today reflect the strategic priorities that we highlighted on the day.”

On May 8, JD entered into exclusive negotiations with the owners of Groupe Courir S.A.S regarding the potential future acquisition of 100 percent of the issued share capital of Courir for an enterprise value of €520 million.

“We are delighted to announce the proposed acquisition of Courir, a business held in high regard in the European sportswear community,” said Schultz. “We look forward to concluding the contemplated transaction, welcoming the Courir team to the Group and then working with management to fulfill Courir’s global potential. Investing in quality complementary concepts whilst furthering the growth of JD itself is a key strategic pillar for the Group and one we will continue to pursue in the future.

The business is currently majority owned by Equistone Partners Europe, which acquired Courir in 2018 following the carve-out from Groupe Go Sport. Following French law, Courir management will now commence consultation processes with its relevant employee representative bodies before being able to enter into a binding sale and purchase agreement for the transaction.

The transaction will need to be notified to the European Commission according to European Union Law. Completion of the acquisition is therefore conditional on receipt of merger control approval. Given the potential timings associated with the consultation and competition assessment processes, completion of the transaction would not be expected before the second half of 2023.

After deducting net debt of €195 million, the amount payable at completion, subject to certain adjustments, would be €325 million funded =through available cash resources. The net debt of €195 million in Courir principally constitutes existing funding lines of approximately €210 million refinanced at completion.

Based in France, Courir is a leading player in the European sports footwear and apparel sector with 313 stores bannered as Courir across six countries in Europe as follows:

  • France: 191 stores operated directly and 66 operated by affiliates
  • Spain: 24 stores (all operated directly)
  • Belgium: 22 stores (all operated directly)
  • Portugal: 5 stores (all operated directly)
  • Netherlands: 3 stores (all operated directly)
  • Luxembourg: 2 stores (all operated directly)

In addition, a further 36 stores trade under franchise agreements as Courir in North West Africa, Middle East and French overseas territories. Further, two stores trade as Naked in Denmark, an elevated female sneaker business.

At the Group’s recent Capital Markets Event, JD emphasized the importance of ‘Complementary Concepts’ to leverage its existing premium concepts, including JD. This proposed acquisition is said to be in line with that growth strategy as Courir operates stores with a primary focus on female consumers. The senior management team and operational infrastructure of Courir would be retained, and it is the intention that Courir would maintain its identity and would run autonomously from JD’s French operations. Leveraging Courir’s extensive knowledge in managing female-oriented stores would significantly broaden the capabilities and global opportunities across the Group.

For the 52-week period ended 31 December 2022, Courir had consolidated revenues of €609.8 million, which included €100.3 million from the combination of the sale of product on a commission basis to the affiliates and other commission income from franchisees, a profit before interest and tax of €47.4 million and gross assets of €678.4 million.

The contemplated transaction constitutes a Class 2 transaction under the U.K. Listing Rules.

In the Group’s recent Capital Markets Event, JD also confirmed that one of its key strategic pillars was to secure greater control over the long-term global development of JD and prioritize the development of the JD brand. From a European perspective, this has resulted in engagement with the minority shareholders in a number of our subsidiary businesses across Europe:

  • Germany: JD has completed the acquisition of the remaining 20 percent of JD Sports Fashion Germany GmbH.
  • Iberia: Following the receipt of a formal buy/sell notice from Balaiko Firaja Invest, SL and Sonae Holdings, SA (together the ‘Minority Parties’), who collectively hold 49.98 percent of Iberian Sports Retail Group, SL (ISRG), the Group is now engaged in formal discussions with the Minority Parties with regards to the future ownership structure of ISRG, including the JD shareholding held by ISRG. There are three possible outcomes from this process, although it is expected to be later in the summer before there is clarity as to which outcome will be progressed by the parties: the Group acquires the 49.98 percent holding in ISRG currently held by the Minority Parties; the Minority parties acquire the Group’s 50.02 percent holding in ISRG; the Group simultaneously acquires the Minority parties interest in JD across Iberia; and No change to existing shareholdings.

“Securing greater control over the long-term development of JD and prioritizing the development of the JD brand is a key pillar in our growth strategy in Europe. It will give us simpler decision-making, which will allow us to use our assets with more efficiency. At the same time, it will considerably simplify the group operations. We thank our partners for their contribution to the development of JD across Europe and for their constructive engagement.”

Photo courtesy JD Sports