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.
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.”
