JD Sports Fashion, which recently bought an athletic footwear retail chain in France, Chausport, continues to buy new properties, this time in the branded rugby business. While announcing a week ago its takeover of the “key trading assets” of Canterbury Europe along with the global rights to the Canterbury New Zealand name, the flourishing British sporting goods retailer disclosed that on July 3 it acquired a major British competitor, Kooga Rugby.
Company officials stressed that the two brands will be managed separately and will be made available to other retailers as well, but they could not tell why the acquisitions had not been made instead by Pentland Group, JD’s major shareholder, which is an expert at brand-building and licensing. Pentland had no comment on this. A statement by JD said it believes that “these branded wholesaler acquisitions can be developed profitably and that the global intellectual property rights will generate royalty income.”
JD did not disclose the price paid for Kooga, but said it was paying £6.5 million (€7.6m-$11.0m) in cash for the assets of Canterbury. The aggregated annual worldwide sales of Canterbury are estimated at around $120 million, of which $55 million are made in Europe. Reportedly, Kooga had sales of £10 million (€11.7m-$16.6m) in 2007, but they apparently declined sharply afterwards. Last June, JJB Sports said that it was considering the sale of its 48 percent stake in Kooga, which it acquired two years ago, and that it had recently shifted purchases of rugby apparel from Kooga to Cotton Traders.
JD’s acquisition does not include debt of about £60 million (€70.3m-$99.7m) owed by Canterbury Europe, the U.K.-based company that went into receivership a few weeks ago. It does include its French sales subsidiary, which handles sales in Continental Europe. Many officials of the British firm have left, however, and JD officials were not sure whether they would retain some of the sponsorship contracts previously signed by Canterbury with several rugby and cricket clubs in the U.K.
Canterbury’s current operations in Australia, New Zealand and Japan will be turned into licensed operations, like the one in South Africa, which changed hands recently. JD is also planning to pursue negotiations for a possible license in Argentina.
The previous ownership structure of Canterbury was rather complex, but the deal with JD will simplify it. The brand rights were taken over about four years ago from a company in New Zealand, Lane Walker Rudkin (LWR), which itself went into receivership last April. That company, a manufacturer of sportswear and underwear, had launched a new brand of rugby jerseys called Union.
JD Sports’ shopping spree may not be over yet. Besides its ongoing interest in other more important assets of the struggling JJB, JD Sports is said to be interested in the takeover of Champion Sport, the second-largest sporting goods retailer in the Irish Republic. Company officials would not comment on this rumor.
