Tuesday 23 June saw Go Outdoors enter administration. Whilst the instruction has been to stay indoors for the last few months, the Go Outdoors chain has been struggling with significant losses with declining sales since the chain was purchased by JD Sports in 2016 for £112m.
JD Sports were already looking at options for the 67 Go Outdoors stores before the impact of the lockdown was felt, with lockdown compounding the issue and leaving no option but to seek insolvency advice.
Executive Chairman Peter Cowgill said “As a consequence of COVID-19, Go Outdoors was no longer viable as previously structured and would have absorbed capital at an unsustainable rate for the foreseeable future”
On the appointment of Deloitte as administrators, the business and assets of the company were sold back to JD Sports in a £56.5m pre pack deal. Given that JD Sports has a charge, most of this will be heading back to them as they attempt to restructure the chain.
Most stores are giant warehouses with a huge amount of stock from camping equipment, hiking gear and fishing tackle and everything in between, which must come with significant overheads. All Go Outdoors stores will be initially occupied for a year whilst lease negotiations begin with landlords. At present all the employees have been retained, a large majority of which are most likely on furlough at present.
As mentioned in yesterday's article, this is likely to be the tip of the pre pack iceberg. Lets hope that the legislators remain calm, try not to panic as they rush to the lifeboats, while the industry prays that the pre pack will not sink like the Titanic if the PrePack Pool Limited is made compulsory.