Recently, British sportswear and fashion retailer JD Sports announced the acquisition of Go Outdoors, an outdoor sportswear retailer, for 112.3 million pounds, consolidating its position as the UK's largest listed sporting goods retailer. Today, Xiao Bian will take everyone to understand the development of JD Sports and deepen its influence on the UK sports retail market.
history
JD Sports (JD Sports) was founded in 1981. J and D represent the founders John Wardle and David Makin respectively. Initially, there was only one storefront.
In 1983, it opened a store in Manchester's Ardale Shopping Center. In 1989 it opened its first store on Oxford Street in London. In October 1996, JD Sports was first listed on the London Stock Exchange. It is reported that JD Sports now operates more than 900 sports fashion stores and 180 outdoor stores, most of which are located in the United Kingdom.
Currently, 57% of JD Sports is in the hands of Pentland Brands, a Rubin family company. The Pentland brand is part of the Pentland Group, the UK's global brand management company. The owner is Stephen Rubin and his family, which specializes in sports, outdoor and fashion brands. In 2007, the Pentland Group achieved sales of 973 million pounds, making it the 42nd largest private company in the UK.
At present, JD Sports focuses its business on sports fashion and focuses on fashionable sportswear, such as the cooperation series of British female singer Rita Ola and Adidas. On the other hand, it is also very concerned about sports and leisure trends such as sports shoes, sportswear, and fitness wear.
Acquisition
The recent acquisition of Go Outdoors by JD Sports is a private equity firm based in Sheffield, with 58 stores in the UK. Revenue for the 2015/2016 fiscal year was 202.2 million pounds, and profit before tax was 4.9 million pounds.
Manchester-based JD Sports already owns a number of outdoor brands such as Blacks, Millets, Ultimate Outdoors and Tiso. JD Sports pointed out that most of its current outdoor stores are located in the downtown commercial street, while Go Outdoors stores are mainly located in suburban commercial areas. Therefore, the combination of the two will further expand the outdoor business coverage of JD Sports.
JD Sports CEO Peter Cowgill said: "Go Outdoors will be a powerful complement to our existing outdoor business."
“The two sides achieved the best complementarity in their locations. Go Outdoors is a one-stop retail model in the suburbs of the city. We mainly sell brands such as Blacks and Millets on the Commercial Street. Their joining will further strengthen our services in the outdoor areas... I look forward to the future of JD Group."
Go Outdoors was founded in 1988 by founders Paul Caplan and John Graham. After the acquisition is completed, the two will withdraw from the industry. Under the agreement, JD Sports will take over approximately 16 million pounds of net debt from Go Outdoors after taking over from existing investors YFM Equity Partners and 3i Group.
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Driven by the strong growth in sales, JD Sports' share price has now risen by 53%. In September of this year, JD Sports announced a record profit for the first half of the year. Moreover, it also announced plans to open stores in Australia. At the same time, it has not been affected by Brexit, and plans to continue its expansion in the European market.
In contrast, JD Sports' strong opponent, Sports Direct, was less fortunate. According to S&T's previous introduction to Sports Direct, its Lonsdale, USA Pro, Firetrap, Slazenger and other private brands accounted for half of the revenue, and this part of the brand is paid in US dollars. After the turbulent exchange rate after Brexit, the company The import cost will be greatly increased. Secondly, due to the impact of warm winter weather, Sports Direct will see a serious decline in winter sales. Third, it is also influenced by sports sponsorship.
Just after announcing the overseas expansion plan, JD Sports announced the acquisition of Next Athleisure, a young Australian fashion retailer, and took 32 stores into its pocket, making it an important platform for JD to open the Australian market. Recently, JD also acquired some businesses in Portugal and the Netherlands.
JD Sports said that although the United Kingdom decided to leave the European Union, in the next two or three years, the business sector will face some destabilizing factors, but this will not affect its European expansion plan.
Moreover, before the expansion plan, JD Sports' outdoor brand Blacks and menswear retail brand Scotts also began to focus on the offline retail business. Earlier this year, at the Trafford Centre in Manchester, Scotts tried a brand new store model, replacing it with a more spacious façade, newer signs and brighter lights. At present, the latest store concept will be applied to Birmingham Bullring Shopping Center. At the same time, Blacks also introduced a brand new store style, with a digital screen in the store, showing a self-service shop design style.
future
To the surprise of most analysts, JD Sports' profit for the six months surged by 73%, which was nearly 1 billion pounds higher than the market value of competitors Sports Direct. Public evidence shows that JD Sports is making outstanding progress. At the end of July this year, its half-year sales increased by 20% to an increase of 970.6 million pounds. Customers flocked to buy its high-end sports shoes and the latest sportswear.
Five years ago, Sports Direct boss Mike Ashley once vowed, "I will kill JJB Sports first and then JD Sports." However, Sports Direct's chief executive, Dave Forsey, has to admit that JD Sports has taken control of the lucrative casual wear market.
JD Sports CEO Gairil said that he was a bit surprised by Sports Direct's defeat, but not so serious. "I think we don't have full control of the market. There is still a lot of work to be done. However, we have already become an industry leader. We have no intention of taking away market share, just to consolidate our position," added Cauillil.
JD Sports has succeeded because it does not stick to the strategy of puerile, like Sports Direct, and thus conflicts with Nike, Adi and other sports giants. Instead, it has retained the latest sports shoes and yoga apparel, attracting more fashion-oriented wealthy people.
“Fast changes in fate are proof that JD Sports has always insisted on quality-oriented decisions,†said Nicholas Hyett, an analyst at Hargreaves Lansdown, a financial services company.
In Sui and Tang's view, the reason why JD Sports has achieved its current results cannot be separated from its timely adjustment in its strategic layout and its adherence to the high-end line.
First of all, pay attention to the customer's shopping experience. According to Cauque, they are now investing heavily in store renovations to allow customers to get a higher-end shopping experience and encourage brands such as the Adidas Stella McCartney collection to sell.
Second, keep up with the market trend of sports and leisure. According to Morgan Stanley's statistics, the industry rose by 42%, and the current global market value reached 270 billion pounds. The trend of sports and leisure not only promotes sales growth, but also allows more female customers to imitate the supermodel's dressing styles such as Carly Claus, thereby establishing a loyal customer base.
Third, actively use the influence of sports marketing. In the Rio Olympic Games in 2016, the outstanding performance of the Welsh football team also brought sales growth to its exclusive partner JD Sports.
JD Sports on Bournemouth Jersey Advertising
Finally, timely seize the opportunity to make up for the short board. Prior to this, the outdoor business had not been the strength of JD Sports and even became a drag on company revenue. However, in a recent financial report, the loss rate of JD Sports' outdoor business, including Blacks and Millets, dropped by half to 2.25 million pounds. As a result, JD Sports focused on market opportunities, and the decision to acquire Go Outdoors hopes to seize the opportunity in the new market segments when competitors are sluggish.
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