JD Sports Explores Equity Financing as It Builds on Expansion Strategy
JD Sports Fashion Plc is considering an equity capital raise as it seeks to finance new investments.
The British sportswear retailer, which has recently been working on its business expansion, confirmed that it was “exploring additional funding options, with a view to increasing its flexibility to invest in future strategic opportunities.” It shared that a non-preemptive equity placing was among those funding options.
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The announcement came a day after United Kingdom-based media outlet Sky News reported that the chain was in talks over a potential 400 million pound (or $545.56 million) share sale that could occur as soon as this week. Should it move forward with the sale, the funds are expected to be used to boost its coffers following the recent $325 million acquisition of Shoe Palace Corp. (Under the terms of the deal, $100 million was deferred and will be paid on various dates over the course of 12 months, while the founding Mersho family was given equity equivalent to 20% of JD Sports’ U.S. operations, worth $356 million.)
According to JD Sports, the purchase of Shoe Palace allows it to not only bolster its presence on the West Coast, but also “strengthen its connection with the Hispanic and Latino consumers, who represent a significant proportion of Shoe Palace’s customer base.” Its efforts to become a major player in the U.S. began to take shape in March 2018 upon its acquisition of Finish Line Inc. for $558 million.
JD Sports is also reported to have joined the bidding race for Topshop. Multiple publications based in the U.K. have suggested that the athletic company — in a partnership with United States-based retail conglomerate Authentic Brands Group — would snap up the fashion brand after parent Arcadia Group collapsed into administration in late November.
JD Sports was previously in discussions to save Debenhams, which just yesterday sold all of its intellectual property assets, including customer data and selected contracts, for $75.4 million to Boohoo.com UK Ltd. The 243-year-old department store, whose business struggles were compounded by the coronavirus pandemic, filed for administration for the second time in the calendar year back in April.
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