JD Sports Fashion Plc Investment in Joint Venture in South Korea (8243Q)
15 September 2017 - 4:00PM
UK Regulatory
TIDMJD.
RNS Number : 8243Q
JD Sports Fashion Plc
15 September 2017
15 September 2017
JD Sports Fashion Plc
Investment in Joint Venture in South Korea
JD Sports Fashion Plc ('JD'), the leading retailer of sports,
fashion and outdoor brands, announces that, on 14 September 2017,
it entered into a joint venture agreement ('JV') with Shoemarker
Inc ('SMK'), a South Korean retailer of footwear, in relation to
J&S Partners Inc, a company owned by SMK, which currently
trades as the multibranded Hot-T fascia ('Hot-T').
JD has acquired an initial 15% of Hot-T for a cash consideration
of approximately GBP5.5 million. As part of the JV, JD has a call
option, exercisable at JD's discretion, to acquire a further 35%
share of Hot-T following the finalisation of Hot-T's accounts for
its financial year ending 31 December 2017. It is JD's current
intention to exercise this option and to re-fascia the Hot-T stores
as JD. The exercise of this option would result in the
consolidation of the results and net assets of Hot-T into JD's
accounts. The business will continue to be operationally run by its
existing management team.
Additionally, a limited number of put and call options
('Options') have been entered into by JD and SMK as part of the JV.
The value of these Options will be based on the fair value of Hot-T
at the time they are exercised and to the extent the exercise of
any of these Options are not at the sole discretion of the Company,
the fair values have been capped with the consideration payable by
either JV partner for the holding of the other partner capped below
25% of JD's Gross Assets.
Information about SMK and Hot-T
SMK operates two retail businesses, Shoemarker (a multi branded
footwear retailer in the sporting goods sector of the market) with
114 stores in South Korea and Hot-T (a multibranded footwear
retailer in the athletic specialty sector of the market) with 23
stores in South Korea and its own website.
The revenue that relates to Hot-T within the SMK business for
the year to 31 December 2016 was KRW 25.5 billion (approximately
GBP17.2 million), with a store EBITDA of KRW 3.0 billion
(approximately GBP2.0 million), gross assets of KRW 42.6 billion
(approximately GBP28.8 million), an operating profit (before
exceptional items) of KRW 0.6 billion (approximately GBP0.4
million) and a loss before tax after exceptional charges,
principally relating to one off stock write offs, of KRW 6.2
billion (approximately GBP4.2 million).
Peter Cowgill, Executive Chairman, commented:
"We are delighted to be entering into this JV which gives JD the
opportunity to enter a new market of over 50 million people with a
proven operator. This JV will further strengthen JD's global
presence."
Enquiries:
JD Sports Fashion Plc Tel: 0161 767 1000
Peter Cowgill, Executive Chairman
Brian Small, Chief Financial Officer
Neil Greenhalgh, Group Financial Controller
MHP Communications Tel: 0203 128 8100
Andrew Jaques
Barnaby Fry
Gina Bell
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulations (EU) No. 596/2014
("MAR") and is disclosed in accordance with the Company's
obligations under Article 17 of MAR.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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