JD Sports embarks on South Korea joint venture
Sportswear retailer JD Sports has entered into a joint venture agreement with South Korean sports footwear retailer Shoemarke in relation to J&S Partners, a company owned by SMK, which currently trades as the multi-branded Hot-T fascia.
JD has acquired an initial 15% of Hot-T for around £5.5 million. As part of the joint venture, JD has an option to acquire a further 35% share following the finalisation of Hot-T’s accounts for its financial year ending 31 December 2017.
In a statement JD said its current intention is to exercise the option and to re-fascia the Hot-T stores as JD. This will result in the consolidation of the results and net assets of Hot-T into JD’s accounts.
Hot-T specialises in athletic footwear and operates 23 stores in South Korea. In the year to 31 December the company’s revenue was around £17.2 million with a store EBITDA of £2 million. The company made a pre-tax loss of £4.2 million after taking account of exceptional charges, principally relating to one off stock write offs.
Never Miss a Retail Update!The business will continue to be run by its existing management team.
Peter Cowgill, JD Sports executive chairman, said: “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.”
