JD Sports Fashion will open about 50 stores in the Middle East after agreeing its first ever franchise deal with Dubai-based GMG, as it kicks ahead with athleisure expansion plans.
Britain’s biggest sportswear retailer said its entry into the region forms part of it strategy to expand into underpenetrated markets.
The 10-year agreement will focus on locations in the United Arab Emirates, Saudi Arabia, Kuwait and Egypt.
The trainers and sportswear chain noted that a heightened focus on health and wellness, as a result of the COVID-19 pandemic, has driven strong growth in the athletic leisure market in the Middle East.
“Through my own career, I have seen firsthand the massive untapped potential for retailers in the Middle East,” JD CEO Régis Schultz said.
In February, JD said it would spend up to £3bn pounds ($3.8 billion) to open as many as 1,750 stores over five years, as Schultz outlined his plans for the retailer to become an athletic leisurewear “powerhouse”.
In May, JD agreed to buy France’s Groupe Courir, which trades from 313 stores.
“This is a ten-year agreement, which will see GMG open 50 stores under the JD fascia by 2028 in UAE, Saudi Arabia, Kuwait and Egypt. GMG has a diversified portfolio of more than 500 GMG Sports Stores, with its flagship brand being Sun and Sand Sports,” analyst at Investec Bank said.
“This is JD Sports’ first franchise agreement, which management talked about as an avenue of opportunity for its Rest of the World division at its recent capital markets event in February.”
They added: “Regis Schultz , set out his ‘JD brand first’ strategy and announced a step-up in new store openings to 250-350 a year over the next five years, focused primarily on its existing US and European markets.”
Last week, JD said there had been some softening in trade in its North American business in June, which would be offset by growth in demand in the UK, Europe and Asia Pacific.
Shares in JD are up 16 per cent so far this year.
Reuters- Eva Mathews and James Davey