Go Outdoors has been bought back by JD Sports - here’s what will happen to shops
Go Outdoors has been bought back by owner JD Sports for £56.5 million, after the parent company pushed it into administration.
The retailer said the move would help to preserve as many jobs as possible at the outdoor chain, which employs 2,400 staff across 67 stores.
Why did Go Outdoors enter administration?
JD Sports said in a statement on 22 June that it had decided to start the administration process for Go Outdoors, after considering a number of options, including a possible sale.
The outdoor retailer, which specialises in camping equipment, bikes and clothes, has been struggling in recent years, with the firm forced under increasing pressure due to coronavirus closures.
JD Sports said it had filed a notice of its intention in court, which protects the company from legal action and its creditors for a period of 10 days, until an administrator is found.
Corporate finance firm Deloitte was hired by the retail group on 23 June, but it has since decided to press on with a major restructuring of the company instead.
What will happen to stores?
The majority of the retail stores are intended to be kept by JD Sports, after it decided a fundamental restructure could give the business a potential future.
The retailer added that all existing staff will be transferred as part of the pre-pack administration sale.
Peter Cowgill, executive chairman of JD Sports, said, "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."
Is coronavirus to blame?
Go Outdoors was already struggling for business before the coronavirus outbreak, but its problems were exacerbated after being forced to close its doors for three months due to the pandemic.
Michael Magnay, joint administrator, said, "Like many high street retailers, Go Outdoors Ltd has been seeking to address a number of underlying business challenges in the current UK retail environment, which have been exacerbated by the impact of Covid-19.
"This successful sale will provide Go Outdoors with an opportunity to restructure its business to secure its future for the long term.
"I'm particularly pleased that we have been able to secure the employment of all the Company's workforce, and we'd like to thank all employees and key stakeholders for their support throughout this process."
Several other high street brands have been forced into administration as a result of the coronavirus outbreak.
Fashion retailers Oasis, Warehouse, Accessorize and Aldo are among a number of chains that won’t reopen for business after the UK lockdown is lifted, as well as a number of Debenhams stores.