Go Outdoors has been placed in and acquired back out of administration in a pre-pack deal by its former and now current owner JD Sports.
A fundamental restructuring of the retailer has been deemed necessary with coronavirus having forced the closure of its 67 stores across the country.
Statements from JD Sports explain that one effect of the enforced COVID-19 shutdown was “bringing into sharper focus the operating costs of the business”, with a particular issue being its “extremely inflexible” property leases.
Those leases are said to have entailed “upwards only” rent reviews, which contributed to JD Sports taking the view that it would need to fundamentally overhaul Go Outdoors in order to justify retaining it as part of its wider group.
Advisers were appointed to support the process of Go Outdoors potentially being sold in May but it was subsequently decided that a pre-pack administration deal would be the best route forward.
A consideration of £56.5 million has been paid by JD Sports to reacquire Go Outdoors, with plans in place to see the employment of more than 2,000 staff of the business transferred alongside ownership of its assets.
JD Sports has said “it is the group’s intention to retain the majority of Go’s retail estate and preserve as many job as possible”.
Go Outdoors primarily sells fishing, camping and cycling equipment across its 67 outlets in the UK and via its online presence.
Retail businesses were already faced with a tough operating environment prior to the coronavirus crisis but the COVID-19 lockdown has heaped further financial pressures on to the sector in recent months.
Peter Cowgill, JD Sports’ executive chairman, said in a statement: “As a consequence of COVID-19, Go Outdoors was no longer viable as previously structured and would have absorbed capital at an unsustainable rate for the foreseeable future.
“Having investigated all available options for the business, we firmly believe that this restructuring will provide Go Outdoors with a platform from which it can progress whilst remaining a member of the group.
“Most importantly, we are pleased that it will protect the maximum number of jobs possible.”