In a surprising move, Frasers Group, the retail giant, has announced its acquisition of a range of premium fashion brands from its competitor, JD Sports Fashion. The deal, which is valued at £47.5 million, involves Frasers Group taking over JD’s ownership of well-known brands such as Tessuti, Giulio, Pretty Green, and Scotts, among others. Frasers Group will also assume the debts associated with these brands. The funding for the acquisition will come from Frasers Group’s existing cash resources.
While eight of the brands have already been acquired, the remaining seven are set to be completed in early 2023. JD Sports Fashion made the decision to sell these brands as part of a strategic review aimed at simplifying its branded fashion offerings and focusing on expanding its core premium sports fashion business both internationally and digitally. As a result, the company will incur a non-cash exceptional charge of approximately £100 million in its upcoming annual accounts.
Régis Schultz, CEO of JD Sports Fashion, expressed that the sale of these non-core brands will allow the company to prioritize the growth opportunities presented by its global sports fashion businesses. He also conveyed his gratitude to the colleagues at the brands being sold for their contributions to the group over the years.
This acquisition is noteworthy as it highlights the diverging strategies of Frasers Group and JD Sports Fashion. While both companies were previously known for their dominance in sports-linked retail on the British high street, Frasers Group’s expansion into pure fashion businesses signifies a shifting ambition. In contrast, JD Sports Fashion remains focused on sports-related acquisitions.
Beyond the differences in business strategies, the changes at these companies also include a shift in leadership. The longstanding rivalry between former CEOs Mike Ashley of Sports Direct (now Frasers Group) and Peter Cowgill of JD Sports Fashion is now a distant memory, as Michael Murray now leads Frasers Group and Régis Schultz heads JD Sports Fashion. These shifts in focus and leadership reflect the evolving landscape of the retail industry and the competitive nature of fashion retail.
Overall, the acquisition of JD Sports Fashion’s premium fashion portfolio by Frasers Group exemplifies the differing approaches of these companies and underscores the changing dynamics within the retail sector. With its expansion into the fashion market, Frasers Group aims to establish a stronger presence, while JD Sports Fashion plans to leverage its core sports fashion business and pursue growth opportunities internationally and digitally.
Useful links:
1. BBC: Frasers Group acquires premium fashion brands from JD Sports Fashion
2. Retail Gazette: Frasers Group to acquire range of premium fashion brands from JD Sports
