UK sports company dumps loss-making Canterbury brand
Iconic but loss-making rugby clothing brand is sold after an unsuccessful three-year attempt to build it in the European and US markets.
BUSINESSDESK: British sports retailer JD Sports is selling the iconic but loss-making Canterbury rugby clothing brand to its majority shareholder Pentland after an unsuccessful three-year attempt to build it in the European and US markets.
The sale to specialist sports footwear company Pentland is for £22.7 million, all but £1 of which reflects the value of Canterbury's debt.
JD Sports paid £6.5 million for the assets of Canterbury in 2009, saying it intended to consolidate its hold on rugby wear, but has concluded while there are brand-building opportunities, Canterbury is entrenched in the Australasian markets where JD Sports has little presence.
As a related party transaction, the purchase will require shareholder approvals at a meeting to be held on September 13.
The deal involves Pentland paying £1 for the assets of Canterbury, with the remainder to purchase the debt of the brand, which has gross assets which JD Sports says are valued at £32.6 million.
Canterbury supplies kit to the South Africa and Scotland teams and has signed a four-year supply deal with the Rugby Football Union for its needs. But other national sides use other suppliers. The All Blacks, for example, use adidas kit.
The company made a pre-tax loss of £1.1 million in the year to January 28.
Since 2009, JB Sports built Canterbury's global network into US and European markets, but has since decided to close both.
While the board "continues to believe that Canterbury is a significant brand development opportunity", it also says "the board does not believe that the Canterbury brand will be a key component of the group's future retail proposition".
"A substantial element of Canterbury's revenue and earnings are located in New Zealand and Australia, territories where the group has limited operations and which are significantly distant from the core retail focus of the group in the UK and continental Europe."
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UK sports company dumps loss-making Canterbury brand
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