Sports Direct buys Jack Wills out of administration
Sports Direct, owned by Mike Ashley (pictured), has bought Jack Wills for a cash consideration of £12.75m, including its 100 stores in the UK and Ireland.
The brand’s UK trading assets, including its distribution centre, were sold in a pre-pack deal to Sports Direct International. Will Wright and Chris Pole from KPMG’s restructuring practice were appointed as joint administrators earlier today (5 August).
KPMG said that, like many other retailers, Jack Wills had experienced mounting cash flow pressures “amidst some of the most difficult trading conditions seen on the high street in years”.
Sports Direct, owned by Mike Ashley (pictured), has bought Jack Wills for a cash consideration of £12.75m, including its 100 stores in the UK and Ireland.
The brand’s UK trading assets, including its distribution centre, were sold in a pre-pack deal to Sports Direct International. Will Wright and Chris Pole from KPMG’s restructuring practice were appointed as joint administrators earlier today (5 August).
KPMG said that, like many other retailers, Jack Wills had experienced mounting cash flow pressures “amidst some of the most difficult trading conditions seen on the high street in years”.
For the year ended 28 January 2018, Jack Wills had gross assets of £98.97m and made an operating loss of £14.2m and a net profit of £19.2m.
As well as 100 stores in the UK and Ireland, the company also has six franchised shops in Kuwait, Saudi Arabia, the UAE and the Channel Islands. It employs around 1,700 staff.
The directors are currently assessing options for the international business.
Suzanne Harlow, chief executive of Jack Wills, said: “For the past year, we have been focused on improving the Jack Wills proposition and the group’s financial performance.
“Despite significant progress, the challenging trading environment led us to conclude that the company’s long-term future would be best served as part of a larger group, and Sports Direct will enable us to do this.”
The takeover may raise eyebrows across the industry, given that it has been mere weeks since Sports Direct reported heavy losses at House of Fraser, which it bought out of administration last year. At the time, Ashley described the department store’s problems as potentially “terminal”, with the chain making a £54.6m operating loss in the 52 weeks ending 28 April.
Sports Direct’s trading update also warned investors about “significant uncertainty” regarding its future profits across its brands, and showed a €674m (£605m) tax bill from the Belgian authorities.
Sports Direct has appointed CBRE to advise on all property-related matters following its acquisition of Jack Wills.
CBRE has a long-standing relationship with Sports Direct. The property agent was also named sole adviser in August last year on all property matters related to its acquisition of troubled department store House of Fraser.
James Keany, head of national retail agency at CBRE, commented: “We continue to advise on property-related matters across the Sports Direct portfolio and are pleased to have been appointed on this latest property mandate for Jack Wills, which is one of Britain’s most recognised fashion brands.”
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