JD Sports’ North America Warning; Kurt Geiger Has New Financing & More
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The retail landscape continues to shift.
JD Warns on North American Sales
JD Sports on Tuesday warned that business trends in North America softened in June, offsetting positive trends in the U.K., Europe and Asia Pacific.
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“Inventories in our businesses in North America and are at normal levels and we will be no more promotional than we need to be to remain competitive,” the company said.
JD said trends seem to be moving in a positive direction, with May’s organic sales growth at constant exchange rates around 8 percent. That’s down from 15 percent as of May 17, but still “in line with management expectations.” The shift reflects tougher comparatives in the prior year as the “supply chain normalized and the availability of product improved,” JD said.
JD provided the update on Tuesday at the company’s annual general meeting of shareholders. It expects profit before tax and adjusted items for the full year ending Feb. 3, 2024 to be in line with the current outlook for = 1.04 billion pounds ($1.28 billion). JD has opened 32 net JD stores since Jan. 29, and is “on track” to open more than 150 by the end of the year. The acquisition of Paris-based Courir, a 313-store, six-country, female-focused footwear seller, should also close this year as planned.
Kurt Geiger gunning for global growth
Footwear and accessories firm Kurt Geiger got at least 150 million pounds ($189.5 million) from Wells Fargo to fuel expansion and international growth.
Kurt Geiger CFO Dale Christilaw said the financing gives the “significant flexibility to accelerate our expansion across North America and Europe.”
The facilities were provided by Blazehill Capital and Wells Fargo Capital Finance U.K. London-based Blazehill is known for secured lending facilities averaging 50 million pounds ($63.2 million).
“Unlocking additional liquidity for such an established business is a great example of what we’re trying to achieve at Blazehill Capital. Kurt Geiger’s continued success is testament to an impressive management team with a dynamic approach to growth, and with this new funding package the company can now continue to expand its global footprint,” said Jake Hyman, head of originations at Blazehill.
“Wells Fargo has extensive experience financing retail and fashion brands, and we continuously challenge ourselves to deliver differentiated debt solutions for our clients,” Tayyib Chowdhry, originations director at Wells Fargo Capital Finance UK, said. “We’re especially pleased to have structured a flexible financing solution at this exciting period when the business has such positive and sustained momentum.”
CB Insights data indicates that the round totaled about 191.3 million pounds ($241.7 million). Representatives at Kurt Geiger did not respond to a request for comment.
Founded in 1963, the premium footwear and accessories company was acquired by private equity firm Cinven in 2015 for 245 million pounds ($371.7 million). Kurt Geiger now operates over 70 stores and over 100 concessions in departments stores such as Harrods and Selfridges. It also has wholesale partnerships with Dillard’s, Nordstrom and other U.S. retailers.
Boohoo in ‘word war’ with Revolution Beauty
Boohoo is butting heads with the board of a beauty company where it controls a 26.6 percent stake.
Revolution Beauty Group plc saw its shares suspended from trading in September after it failed to disclose its 2022 annual results and auditors raised concerns about its financial statements. The suspension was lifted on Wednesday.
Revolution’s annual general meeting of shareholders on Tuesday took an unusual turn. Revolution’s board—including two new board directors, not of Boohoo’s choosing, who were named by the sole remaining board director—reappointed CEO Bob Holt, CFO Elizabeth Lake and chairman Derek Zissman to the board.
Boohoo had called for the removal of all three executives and the appointment of its two board nominees, former New Look chairman Alistair McGeorge and Boohoo finance director Neil Catto, before Tuesday’s annual meeting.
Revolution Beauty said in a statement prior to Tuesday’s meeting that Boohoo’s request was “value-destructive, opportunistic and self-serving.” Revolution’s board also accused Boohoo’s actions as a “cynical attempt to seize control of the company without financial outlay nor any compensation to Revolution Beauty shareholders.” Revolution also said in a separate statement that neither McGeorge nor Catto, who are on Boohoo’s board, have the “relevant experience in running a business in the beauty sector, nor in supplying a store estate and beauty product range which is focused on the high street.”
At Tuesday’s annual meeting, Revolution’s chairman indicated a willingness to adjourn the meeting so that other shareholders could consider Boohoo’s proposals and see whether any wished for “Boohoo’s attempted takeover of the company’s board to proceed.” The chairman used shareholder proxies to vote against the adjournment of the meeting, according to a regulatory statement filed on Tuesday by Revolution Beauty.
How this shakes out remains to be seen.
Christopher Kane enters administration
The future of fashion house Christopher Kane is unclear.
After going into administration late last month, the company has a few options, from finding an investor or buyer to shutting down if all else fails.
The Scottish designer, a regular on the London Fashion Week calendar, founded his eponymous ready-to-wear line in 2006. Former first lady Michelle Obama, Kate Middleton, Anne Hathaway and Emma Watson have all worn Kane’s designs.
Kering Group acquired a 51 percent stake in Kane’s business in 2013, but eventually sold back its stake to Kane and his sister-cum-partner Tammy five years later. The label has faced declining sales since the pandemic. Its last P/L statement for fiscal 2020 reflected a loss; it wasn’t required to file in 2021.
And Kane is now part of a group of designers that closed stores in the aftermath of the Covid-19 pandemic. One of those designers was Nicholas Kirkwood, who showed his final collection in Fall 2022 before shutting down his 18-year-old namesake shoe brand in February.
The brand just started to market itself for sale, and its future should be known before the end of summer.
Hunter Boot also in administration
Hunter Boot, best known for its waterproof Wellington boots, also entered administration earlier this month.
The Edinburgh-based footwear brand, whose origins date back to 1856, has been struggling for some time. Reduced demand, supply chain disruptions and higher production costs all contributed to its financial and operational difficulties since the Covid pandemic, when closed China factories missed key footwear shipments.
Its largest market was the U.S. The company also sold related outdoor gear that includes bags, socks and accessories. It holds several Royal Warrants from the late Queen Elizabeth II, indicating its status as preferred supplier of waterproof boots to the British royal family.
Brand management firm Authentic Brands Group has already bought Hunter’s IP assets, securing the brand’s fate and ensuring that the name will live on.
Paperwork in its insolvency case indicated debts of 113 million pounds ($144.1 million). In addition, the brand owes 11.5 million pounds ($14.7 million) to U.K. trade creditors.
