JD Sports Fashion has bought Irish sports fashion retailer Champion.
The acquisition, subject to approval by the Competition Authority in the Republic of Ireland, was for a nominal amount. JD Sports has agreed to advance €17.1m (£14.7m) by way of a secured loan to allow Champion’s outstanding debts, excluding finance lease commitments totalling €2.5m (£2.2m), to be settled.
Sports clothing and footwear chain Champion was founded in 1992 in the Republic of Ireland and is based near Dublin. Champion has 22 stores in town centres and shopping centres in the county and has one store in Northern Ireland. Prior to the acquisition, JD Sports had only eight stores in the Republic of Ireland.
In a stock exchange announcement JD Sports said: “Champion’s established reputation, differentiated product mix and loyal customer base means that we intend to maintain and expand both fascias.
“Further, Champion’s experienced management team, headed by chief executive John Quinn, who will all be retained after the acquisition, will bring an enhanced local knowledge to the operations of the JD stores in the Republic of Ireland.”
In the year to December 31, 2009, Champion said sales were €54m (£46.6m) on an operating loss of €1.8m (£1.5m), and that losses before tax were €4.9m (£4.2m) and gross assets were €36.2m (£31.2m).
JD Sports added that Champion’s performance had been impacted in recent years by the depth of the recession in Ireland and its inflexible fixed property cost base, which JD Sports said it would address.
The JD board expects that the acquisition would be earnings enhancing in future years after investment in the store portfolio and the creation of operating synergies.
Chairman Peter Cowgill said: “We have exchanged contracts for the acquisition of Champion, which will give us an enhanced presence in the Republic of Ireland. By drawing on the current management team’s expertise and local knowledge, we are confident that this acquisition will bring financial benefits in the future.”