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JD buys SergioTacchini licence

John David Group has bought the UK licence for Italian sports label Sergio Tacchini and acquired a 49% stake in design and sourcing firm Focus Group.

Finance director Brian Small said the deal held numerous advantages for JD. “Sergio Tacchini has potential as a brand for us,” he said.
Although JD has grown its own-label clothing to 12% of turnover, Small said it would look to add to its exclusive labels by becoming sole stockist of the brand. Sergio Tacchini is currently sold mostly by independents, with only a few items on JD’s website.

Small said JD would benefit from the skills of Focus Group founders Michael and David Gilbert, as well as marketing and design director David Tolman, all three of whom will continue in their existing roles. “It’s important to us to have the quality of people that Focus management has, in terms of skills and knowledge,” he said.

Focus Group also has licensee or distributor agreements for brands such as Ecko Unltd, Ecko Red, Mark Ecko Cut & Sew, Zoo York, G-Unit and Le Coq Sportif, most of which are stocked in JD’s stores. The Converse licence has been transferred out of the group. It also has an Asian sourcing and manufacturing arm, a UK footwear design unit and sampling office in Taiwan.

The complex acquisition deal involved setting up a new company, Focus Brands Limited, to buy Focus Group Holdings Limited and its subsidiaries.

JD has invested £49,000 to buy share capital, as well as £2.45 million in loan notes. JD and Focus Group’s former owners have also guaranteed a £6.5m bridging loan, with JD liable for 49%. JD may pay up to an additional £12.4m if the new company’s profits exceed certain levels before 2013.

The Sergio Tacchini licence, which lasts until 2019, was bought separately from a Focus Group Holdings subsidiary for £4.3m in cash.
Like-for-like sales at JD for the 44 weeks to December 1 were up 11.8%, with a 12.4% rise for its sports fascias, and 2% for its fashion fascias. But Small said there was a sharp decline in the last seven weeks of the period, to “mid-single digit” growth.

JD opened a new 7,300sq ft flagship store in London’s Oxford Street this week.

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