JD Sports to acquire 60% stake of Marketing Investment Group (MIG) to enter the central and eastern European market, it said on Friday.
(LONDON) – JD Sports Fashion, the biggest sportswear retailer in Britain, has acquired a 60% stake of Marketing Investment Group (MIG) in the central and eastern European market. MIG trades in 410 stores in Central and Eastern Europe.
Based in Krakow, Poland, and founded in 1989, MIG, by a majority of brothers Andrzej and Zbigniew Grzaka, operates 410 retail stores and related websites in nine countries in Central and Eastern Europe.
MIG generated revenue of around £ 200m in the year to the end of January 2020, sells sports fashion shoes, clothing, and accessories from global brands, mainly under Sizer and 50Style Fascias.
An analyst at Peel Hunt said, “It gives JD a foothold in interesting growth markets, and we would expect flagship stores to follow in big cities,”
The financial details of the deal were not disclosed, although JD said JD put and call options have been agreed to enable future exit opportunities for the bridges.
JD Executive Chairman Peter Cowgill said, “This is an exciting acquisition for JD that will further build on the success of our international development strategy, expanding our operations into central and eastern Europe,”
Since the end of the Brexit transition period on 31 December, the European Union has imposed tariffs on goods not made in the UK that are re-exported to block countries.
A JD spokesperson said the MIG deal did not provide enough warehouse capacity to solve that problem, and that the company was looking for a site in the Netherlands or Germany.
JD has been growing overseas since setting up a Malaysian joint venture in 2015. It purchased the finish line in the United States in 2018, the West Coast-focused Shoe Palace in December, and the DTLR Villa in February for $ 495 million.
In 2020, JD Sports has generated revenue of Euro 6110.8 million which was a growth of over one-third percent from last year.