Go Outdoors operates 67 stores across the UK
The jobs of most of the 2,400 Go Outdoors employees look safer after the company’s owners put the business into administration and promptly bought it back under a pre-pack arrangement.
JD Sports Fashion concluded the deal on Tuesday, in what effectively is a restructuring of Go Outdoors to make it viable.
JD Sports, which announced its intention to appoint administrators on Monday, said it intends to honour Go Outdoors customers’ gift cards and returns along with liabilities to suppliers and HM Revenue and Customs.
Existing staff will transfer to a new business formed to take over Go Outdoors, and will retain their previous terms and conditions.
Bury-based JD Sports said on Tuesday it had appointed Michael Magnay and Daniel Butters of Deloitte as joint administrators.
In a statement it said: “Following the onset of Covid-19, the future viability of the business has become materially uncertain with the enforced closure of Go’s stores on 23 March bringing into sharper focus the operating costs of the business.
“Specifically, the terms of the property leases in Go were extremely inflexible with the stores having an average remaining period to lease expiry of approximately 10 years with upwards only rent reviews, many of which are fixed at rates above inflation regardless of the market rent in the location.
“Such factors have resulted in the board deciding that it is not in the best interests of the wider group, and its shareholders, to provide continued financial support to Go in its existing form.”
JD Sports said it had considered a number of options for Go Outdoors, including putting the business on the market. It decided, if restructured, the 67-store business was viable within the wider JD Sports group.
It formed a new company and bought Go Outdoors from the administrators for £56.5m.
The statement said: “The group has taken an initial 12-month licence such that it will continue to occupy all of the Go stores and, subject to realism and flexibility in the future leases, it is the group’s intention to retain the majority of Go’s retail estate and preserve as many jobs as possible.”
Peter Cowgill, executive chairman, said: “As a consequence of Covid-19, Go Outdoors was no longer viable as previously structured and would have absorbed capital at an unsustainable rate for the foreseeable future.
“Having investigated all available options for the business, we firmly believe that this restructuring will provide Go Outdoors with a platform from which it can progress while remaining a member of the group.
“Most importantly, we are pleased that it will protect the maximum number of jobs possible.
“We look forward to having positive conversations with landlords and agreeing new flexible lease contracts which reflect the widely reported challenges of reduced consumer footfall.”
JD Sports, whose ultimate owners are the Pentland Group which also owns the Berghaus brand, paid £112m for GO Outdoors in 2016 to its private-equity owners. The company grew from the Camping and Caravanning Centre in Sheffield. John Graham and Paul Caplan acquired GO Outdoors in a management buyout with backing from YFM Equity Partners and 3i Group.
The pair left the company when JD Sports bought it in a deal in which it also took on £16m of debt.
JD Sports also owns the Blacks, Millets, Ultimate Outdoors and Tiso stores, but these were not involved in the pre-pack administration deal.
