Go Outdoors prepares for pre-pack administration to help recover from coronavirus

Go Outdoors

JD Sports is preparing for a possible pre-pack administration of Go Outdoors after the retailer was laid low by the lockdown.

The FTSE 100 sportswear and equipment group filed a notice of intention to appoint administrators to the outdoors activities with Deloitte being lined up as an administrator.

Sources said yesterday that the filing was intended as a precursor to a restructuring rather than a winding down of the business. This could take the form of a “pre-pack” administration, a controversial tool that can lead to a business being placed briefly into insolvency then sold back to its original owner or related parties, potentially preserving operations and some jobs, but enabling it to write off debts.

JD Sports had also been exploring a sale of the business, Sky News reported this weekend. It acquired Go Outdoors for £112 million in 2016. The chain now has 67 stores and employs 2,300 people.

In the six months to August 3 last year, JD Sports’ outdoors division reported a “significant loss” at Go Outdoors, which dragged the division as a whole down to £20.1 million loss before tax and exceptional items. It also booked a £20.7 million impairment charge on Go Outdoors.

At the time the company blamed problems switching to the use of a new central warehouse in Cheshire. Those problems are thought largely to have been resolved, but Go Outdoors, like many retailers, has struggled to survive lockdown. In April it was temporarily rebranded as “Go Indoors”.

The company is primarily reliant on in-store custom rather than web sales and although it had reopened most of its shops by earlier this month and had reported strong sales of walking gear and bicycles, shopper visits have been well down on last year.