JD Sports plans to buy France-based Courir, in talks on Iberia business

By

Sandra Halliday

Published
May 9, 2023

JD Sports Fashion had plenty of news to share on Tuesday, with changes to its business in Germany and potential changes across Iberia. But the big headline was its proposal to acquire France’s Groupe Courir.

It said it has just entered into exclusive negotiations with the owners of Courir “with regards to the potential future acquisition of 100% of the issued share capital for an enterprise value of €520 million”.

The business has been majority owned by Equistone Partners Europe since 2018, following the carve-out from Groupe Go Sport. 

Courir management “will now commence consultation processes with its relevant employee representative bodies prior to being able to enter into a binding sale and purchase agreement,” we’re told.

The deal will need to get merger approval from the European Commission and given the potential timings associated with the consultation and competition authority assessment processes, completion isn’t expected before the second half.

JD said that after deducting net debt of €195 million, the amount payable at completion, subject to certain adjustments, would be €325 million, which would be funded through its own cash resources. 

Courir is a “leading player in the European sports footwear and apparel sector” with 313 stores under the Courir name in six countries. In France there are 191 stores operated directly and 66 operated by affiliates while in other countries all the stores are directly operated. These include 24 in Spain, 22 in Belgium, five in Portugal, three in the Netherlands and two in Luxembourg.

It has a further 36 stores that trade under franchise agreements as Courir in North West Africa, the Middle East and French overseas territories. Two more trade as Naked in Denmark, “an elevated female sneaker business”.

The company said that its recent Capital Markets Event had seen it focusing on the “importance of 'Complementary Concepts' to leverage our existing premium concepts, including JD. This proposed acquisition is in line with that growth strategy as Courir operates stores with a primary focus on a female consumer”.

It plans to retain senior management and the operational infrastructure of the business and keep its brand identity, running it autonomously from JD's French operations. 

It added that “leveraging Courir's extensive knowledge in managing female-oriented stores would significantly broaden the capabilities and global opportunities across the group”.

It’s a sizeable operation with consolidated revenues last year of €609.8 million. Profit before interest and tax was €47.4 million and it had gross assets of €678.4 million.

Additionally, it said it’s “reviewing options to simplify the shareholdings in a number of its subsidiary businesses across Europe with a view to accelerating the development opportunities that exist for the JD fascia”.

This means that it has completed the acquisition of the remaining 20% of JD Sports Fashion Germany GmbH. 

Meanwhile, in Iberia, it has received a formal buy/sell notice from minority partners Balaiko Firaja Invest and Sonae Holdings.

They collectively hold 49.98% of Iberian Sports Retail Group. (ISRG), and JD is now in formal discussions on the future ownership structure of ISRG.

It said there are three possible outcomes from this process, with clarity on which is most likely not available until later in the summer.

JD could acquire the 49.98% holding it doesn’t own; the minority shareholders could acquire the 50.02% JD holding in ISRG and the group simultaneously could acquire the minority parties’ interest in JD across Iberia; or there could be no change.

CEO Régis Schultz said of all this: “We said at our recent Capital Markets Event that this was the start of a new, distinct chapter in the growth story of JD. The exciting developments that we are announcing today reflect the strategic priorities that we highlighted on the day.

“We are delighted to announce the proposed acquisition of Courir, a business that is held in high regard in the European sportswear community.

“Securing greater control over the long-term development of JD and prioritising the development of the JD brand is a key pillar in our growth strategy in Europe. It will give us simpler decision making which will allow us to use our assets with more efficiency. At the same time, it will considerably simplify the group operations.”

The company is due to release its full-year results on Wednesday next week.