JD Sports parent John David Group today said it had snapped up branded fashion wear chain Bank Stores in a deal worth up to £19.5m (€27.1m).
The acquisition – John David’s second deal in less than a week – will see the firm add Bank’s 49 stores to its growing fashion division.
Sports retailer John David bought the chain from its private equity owners Phoenix Equity Partners and management for £18.5m (€25.7m), with a further £1m (€1.3m) payable dependent on performance in the year to February 2008.
Bank founder Andy Scott, who retained a significant minority shareholding in the group after selling Bank in April 2005, managing director Damian Scarlett and finance director Peter Alecock have retained the same roles after the sale.
News of the takeover comes soon after last week’s announcement of a deal to buy footwear and clothing chain Focus Group Holdings.
John David said today’s buy-out would help boost its fashion division, which also includes the 40-strong Scotts store chain, bought for £4m (€5.5m) in 2004.
The group is planning to retain the Bank brand, with aims to expand the firm further across its base in the Midlands and North-West of England and possibly nationwide.
Bank saw pre-tax losses of £5.4m (€7.5m) in the year to August 31, but John David said the group’s performance had since improved.
John David finance director Brian Small said it was expected to deliver underlying earnings of £3m (€4.1m) in the year to the end of next February, with pre-tax profits forecast to come in at around £1m €1.3m).
Bank was founded by Mr Scott – a former Macclesfield Town footballer – in 1994 and largely sells upmarket sports fashion brands such as Firetrap, Paul Smith Sport, Lacoste and Henleys.
Peter Cowgill, executive chairman of JD, said: “We are pleased to announce our acquisition of this strong retail brand – its trading style complements the trading ethos of JD on the high street and enhances our portfolio of brands and products.
“While we fully recognise the challenges of fashion retail, we believe that our capable management team will effect a successful combination of our current Scotts stores and the Bank chain, creating an enhanced fashion division within the group and a real opportunity for sales and margin growth.”
John David last week offered hope that it was not all doom and gloom on the high street, saying it was set to report annual profits ahead of expectations.
The group said sales rose 11.8% on a like-for-like basis in the 44 weeks to December 1 as performance defied wider depressed retail trading.