JD Sports is set to buy the 50 per cent stake it does not currently own in Iberian Sports Retail Group (ISRG) in a deal worth €500.1million (£427million).
Britain’s largest sportswear retailer will buy-out minority shareholders Balaiko Firaja Invest and Sonae Holdings for complete control of the company.
The FTSE 100 firm told investors in May that it was considering the future of the subsidiary, which was formed in 2018 by merging its Iberian operations with Portuguese company Sport Zone.
Upgrade: JD Sports expects to make ‘no less than’ £550million in pre-tax profits this financial year compared to its previous forecast of between £475million to £500million
ISRG runs more than 460 shops across Europe, including JD’s outlets in Spain and Portugal, Spanish footwear seller Sprinter, and Dutch retailers Aktiesport and Perry Sport.
It also owns Catalan-based online sporting goods seller Deporvillage, and a majority stake in gym machine and equipment distributor Bodytone.
For the 2022 financial year, the business reported consolidated turnover fell by just over €200million to €1.04billion, while pre-tax profits slumped by around a quarter to €73.2million.
JD Sports expects to hold a shareholder vote on the ISRG deal sometime in October before finalising the transaction the following month.
Régis Schultz, the group’s chief executive, said: ‘ISRG is a highly successful business and one of the leading players in sports retail in Iberia. By bringing the two businesses closer together, there is significant potential for accelerating growth.’
At a capital markets event in February, the Bury-based firm detailed plans to become a ‘global sports-fashion powerhouse’ by investing approximately £3billion in opening up to 1,750 more stores over the next five years.
In addition, it is aiming for double-digit growth in operating margin, revenues, and market share in key regions.
Earlier this week, it announced a tie-up with Dubai-based wellness company GMG to launch around 50 outlets in the Middle East to capitalise on the region’s fast- expanding athletic leisure market.
JD Sports said the tie-up would see customers benefit from ‘exclusive access’ to new equipment from major sportswear brands, such as Nike, Adidas, Under Armour and New Balance.
The firm also recently agreed to spend £452.7million buying French retailer Groupe Courir, which runs 313 stores across six countries.
Soon afterwards, JD Sports said that it expected annual profits to top £1billion this year thanks partly to soaring demand for trainers among younger shoppers and a growing trend for informal clothing.
JD Sports shares were 0.4 per cent higher at 138.55p on early Friday morning, meaning they have increased by around 13 per cent over the past 12 months.
