JD Sports has bought back its struggling outdoor clothing chain Go Outdoors from administrators for £56.5m.
The move, which is designed to “preserve as many jobs as possible”, comes with a major restructuring plan aimed at retaining the “majority” of stores, JD Sports said.
Big Four accountancy giant Deloitte had been appointed by JD Sports as administrator for Go Outdoors, which employs about 2,400 people across 67 stores.
The outdoor sports chain, which sells hiking and camping equipment, has struggled along with many other retailers during the pandemic. However its financial situation was already dire before the outbreak, reporting a £40m loss in the six months to 3 August last year.
The retailer confirmed this evening that although it had considered selling Go Outdoors, but had decided that the business had a potential future at the group if it was “fundamentally restructured”.
Existing staff will be transferred as part of the pre-pack.
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.”
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.”