JD Sports Fashion, the major sporting goods retailer that has been performing the best in the tough U.K. market lately, has made an investment of more than £8 million (€9.4m-$12.1m) to acquire a stake of 10 percent in the financially stricken JJB Sports. At the same time, JJB Sports said it had been approached about the possible sale of its fitness centers, which have been more profitable than its stores.
According to unconfirmed reports, the founder of JJB, Dave Whelan, would be prepared to dish out up to £100 million (€117.6m-$151.8m) for JJB’s health clubs, giving the company a much-need cash injection at a time when it needs to pay back a bridge loan of around £20 million (€23.5m-$30.4m) to Kaupthing, the Icelandic bank that collapsed some weeks ago.
JJB says JD bought 25 million JJB shares at a price of 32.25 pence (€0.37-$0.49), a relatively low value that makes it look like a portfolio investment. Sports Direct made a similar investment a few weeks back.
JD had been reported to have shown interest in the acquisition of JJB’s lifestyle business, which includes the Original Shoe Company and Qube footwear retail chains. JD said in a statement it had made the investment because of JJB’s “important place in the performance sports retail market.”