Go Outdoors sold out of administration by Deloitte

26 June 2020 Consultancy.uk

Go Outdoors’ 2,400 staff have been handed a temporary reprieve, after the collapsed company was sold out of administration by professional services firm Deloitte. However, while owner JD Sports insists it will protect ‘the maximum number of jobs possible’, it also confirmed it will now push forward with large-scale restructuring efforts.

In mid-June 2020, it emerged that JD Sports-owned outdoor clothing and footwear retailer Go Outdoors has lined up restructuring experts from Deloitte to review its business, after suffering a sharp downturn in sales due to the Covid-19 pandemic. The firm, which The Sunday Times reported was on the brink of collapse, has already lost £291.1 million in the six months to August 2019, and the lock-down of 2020 compounded the situation, placing 2,400 jobs at risk.

As of June 23rd, Go Outdoors appointed Deloitte as its administrator, and the Big Four audit and advisory firm swiftly oversaw its sale back to JD Sports. The deal saw JD Sports spend £56.5 million to buy back the business, having pushed it into administration in the first place, but in the long-term the owners hope this will actually help to save money.

Go Outdoors sold out of administration by Deloitte

Michael Magnay, joint administrator, said, “Like many high street retailers, Go Outdoors Ltd has been seeking to address a number of underlying business challenges in the current UK retail environment, which have been exacerbated by the impact of Covid-19. This successful sale will provide Go Outdoors with an opportunity to restructure its business to secure its future for the long term. I’m particularly pleased that we have been able to secure the employment of all the Company’s workforce, and we’d like to thank all employees and key stakeholders for their support throughout this process.”

The Go Outdoors situation is similar to that of fashion retailer Quiz, which recently tapped KPMG administrators to restructure its store portfolio. By buying its own subsidiary, Kast Retail, out of administration, Quiz was able to begin a restructuring programme, which includes the renegotiation of rent on its 82 standalone stores in the UK and Ireland.

In the case of Go Outdoors, JD Sports said it considered potential options for the chain, which has 67 stores nationwide, in May, including a potential sale – but ultimately determined that the business had a potential future within the wider group, “if fundamentally restructured.” While for the meantime JD Sports said it will “preserve as many jobs as possible” at Go Outdoors, it will now push forward with a major restructuring of Go Outdoors. The firm confirmed that it intends to “retain the majority” of its retail stores across the country – though that statement does notably make room for some closures and job losses in the future.

Peter Cowgill, Executive Chairman of JD Sports, said, “Having investigated all available options for the business, we firmly believe that this restructuring will provide Go Outdoors with a platform from which it can progress whilst remaining a member of the group. Most importantly, we are pleased that it will protect the maximum number of jobs possible.”


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