Go Outdoors creditors to get just 1p per £1, warns Deloitte
UNSECURED creditors of Go Outdoors, the chain bought back by JD Sports in a pre-pack administration, could recoup just 1p in every £1 owed.
JD Sports, the FTSE 100 sportswear seller, has said it will pay the taxman, its branded stock suppliers, customers’ returns and gift cards. But anyone else will likely be left out of pocket, including landlords, administrator Deloitte’s statement of proposals has shown.
Last month, the retailer reacquired Go Outdoors for £56.5m after it was put into administration. The deal typically sees a business placed briefly into insolvency then sold back to its original owner, allowing it to write off debts. All jobs were preserved.
The administrators received five offers in total as part of the accelerated sale process, according to the report at Companies House.
Deloitte has granted JD a licence to keep Go Outdoors’ 67 branches open while it renegotiates cheaper rents. If it does not succeed, some will likely shut.
JD Sports, which is worth £6bn, paid £112m for the chain four years ago but blamed the pre-pack on inflexible leases, agreed before it took over.
Peter Cowgill, executive chairman of JD Sports, has been on a rent renegotiation crusade, particularly after he was forced to shut almost all of its stores around the world due to lockdown.
“As a representative of the stronger retailers who attract footfall, I’m tired of sitting next door to occupants who are paying 30pc to 40pc less for the same box because they have a lease break or an expiry or have gone through an insolvency process,” he told
The Daily Telegraph this month. “There has to be a realignment. Stronger tenants shouldn’t be subsidising the weaker tenants.”