JD Sports agrees to fully acquire Iberian Sports Retail Group

JD Sports steps up European expansion with €500 million deal to fully acquire Iberian Sports Retail Group

  • ISRG runs more than 460 European stores, such as JD’s outlets in Spain and Portugal
  • JD Sports intends to pay €500.1m (£427m) for full control of the company
  • Earlier this week, JD announced a partnership with Dubai-based wellness company GMG

JD Sports plans to buy the 50 per cent stake it does not currently own in Iberian Sports Retail Group (ISRG) in a deal worth €500.1m (£427m).

Britain’s largest sportswear retailer is buying out minority shareholders Balaiko Firaja Invest and Sonae Holdings for full control of the company.

The FTSE 100 company told investors in May that it was considering the future of the subsidiary, which was formed in 2018 by merging its Iberian operations with Portuguese company Sport Zone.

Upgrade: JD Sports expects to make ‘no less than’ £550m in pre-tax profits this financial year compared to previous forecast of £475m to £500m

ISRG has more than 460 stores across Europe, including JD’s stores in Spain and Portugal, Spanish shoe retailer Sprinter and Dutch retailers Aktiessport and Perry Sport.

It also owns Catalonia-based online sporting goods retailer Deporvillage, and a majority stake in fitness equipment and equipment distributor Bodytone.

For fiscal year 2022, the company’s reported consolidated sales fell by just over €200 million to €1.04 billion, while pre-tax profit fell by about a quarter to €73.2 million.

JD Sports expects to hold a shareholder vote on the ISRG deal sometime in October before closing the transaction next month.

Régis Schultz, CEO of the group, said: ‘ISRG is a very successful company and one of the leading players in sports retail in Iberia. By bringing the two companies closer together, there is considerable growth potential.’

At a capital markets event in February, the Bury-based company made plans to become a “global sports fashion powerhouse” by investing around £3bn to open an additional 1,750 stores over the next five years.

In addition, it is targeting double-digit growth in operating margin, revenue and market share in key regions.

Earlier this week, it announced a partnership with Dubai-based wellness company GMG to launch about 50 outlets across the Middle East to capitalize on the region’s burgeoning athletic leisure market.

JD Sports said the partnership would allow customers to benefit from “exclusive access” to new gear from major sportswear brands, such as Nike, Adidas, Under Armor and New Balance.

The company also recently agreed to spend £452.7 million on the purchase of French retailer Groupe Courir, which operates 313 stores in six countries.

Shortly afterwards, JD Sports said it expected annual profits to exceed £1 billion this year, thanks in part to rising demand for sports shoes among younger shoppers and a growing trend for casual wear.

JD Sports stock were up 0.4 percent at 138.55 p early Friday morning, meaning they’re up about 13 percent over the past 12 months.