Two well-known store chains have announced multi-million pound acquisitions of retail rivals.
JD Sports has acquired Go Outdoors for £112.3million from its private equity owners, while homewares retailer Dunelm is spending £8.5million on the purchase of WS Group.
Peter Cowgill, chief executive of JD Sports, said Go Outdoors was a “great addition” to the group’s outdoor business, which includes the Blacks, Millets, Ultimate Outdoors and Tiso brands.
JD acquired the 58-store tents to cycles retailer from YFM Equity partners and 31 Group. The deal will see Paul Caplan and John Graham, who founded Go Outdoors in 1998, leave the business.
Mr Cowgill added: “The minimal overlap in store locations and their out-of-town, one-stop retailer approach complements the work we have done on the high street with Blacks and Millets and further strengthens our offering in the outdoor sector.
“I am am excited by the future prospects this holds for the JD Group.”
In the 53 weeks to January 31 2016, Sheffield-based Go Outdoors made revenues of £202.2million and pre-tax profits of £4.9million. Shares in JD Sports were up 2.50% to 327.4p in morning trading yesterday following the announcement of the acquisition.
Rob Baxter, retail partner at KPMG, who advised Go Outdoors on the transaction, said: “Competition in the UK retail industry is intense and this pressure is increasingly driving consolidation across the market.
“The sports and leisure sector has been particularly active in mergers and acquisitions over the past year, driven by very attractive demographic trends and a market in which a large number of retailers and brand owners compete.”
Dunelm is to buy loss-making WS Group, which consists of Worldstores, Achica and baby goods retailer Kiddicare, out of administration. Worldstores specialises in home and garden products, while Achica is a members-only online furniture store.
In total, WS Group has 650 employees and Dunelm said the move means that its online operation will more than double in size.
Dunelm chief executive John Browett said: “We are excited to accelerate the growth of our internet operation, more than doubling its size and enhancing our position as the destination homewares retailer in the UK, both online and offline.”
The company said it would pump £15million into WS Group as working capital and retain its management team.
WS Group is expected to make losses of “around £5-10million” this year, but Dunelm has forecast it will at least break even under its first full year of ownership.
