JD Sports Fashion is continuing its acquisitive strategy by snapping up a 15% stake in South Korean multi-brand footwear retailer Hot-T for £5.5m.
As part of the deal JD has the option to buy a further 35% stake of the chain at the end of the year, which it plans to exercise.
The stores will be rebranded as JD Sports but they will continue to be run by the existing management team.
Hot-T is owned by SMK, which has two retailer businesses: Shoemarker, a multi-brand sports footwear retailer with 114 stores in South Korea, and Hot-T which has 23 stores in South Korea and its own website.
Hot-T’s revenue for the year to 31 December 2016 was KRW25.5bn (£17.2m). Store EBITDA was KRW3bn (£2m). The business had an operating profit (before exceptional items) of KRW0.6 bn (£400,000) and a loss before tax after exceptional charges, principally relating to one off stock write offs, of KRW6.2 bn (£4.2m).
Peter Cowgill, executive chairman of JD Sports, said: “This joint venture gives JD the opportunity to enter a new market of more than 50 million people with a proven operator.”
The news follows record results at the retailer for the first half of its financial year. Profit before tax was up 33% to £102.7m for the 26 weeks to 29 July, as group revenue increased by 41% to £1.4bn.
During the half year, the group ramped up its international expansion opening 23 stores across Europe and its first four shops in Australia.