Yahoo Finance JD Sports in talks to join forces with Authentic on Topshop bid
JD Sports Fashion (JD.L) is reportedly in talks with US company Authentic Brands over the latter’s bid to takeover UK brand Topshop’s operations.
Topshop is one of the many brands owned by Arcadia, a retail group that was placed into administration, a form of bankruptcy, at the end of last year.
At the time, JD Sports was in rescue deal talks with collapsed department store chain Debenhams. But it pulled out, possibly after the news about Arcadia: Arcadia’s brands have concessions within Debenhams department stores and analysts estimated around 5% of Debenhams’ revenue came from these pop-ups.
Now, Sky News is reporting that JD is talking to Authentic about becoming the operating partner for Topshop, in the event that Authentic ends up buying the brand. Authentic has also reportedly been looking into a takeover of Debenhams.
“Sky News has learnt that Authentic Brands Group has been holding early-stage discussions with JD Sports about the London-listed company running Topshop's operations if its bid is successful,” the publication said.
“The combination of Authentic, which also owns Forever 21, and JD Sports, one of the most adept players in British retailing, adds up to a powerful contender to buy Topshop from the administrators to Arcadia Group,” it added.
READ MORE: Debenhams to permanently shut six stores including Oxford Street branch
People close to the talks between Authentic and JD described them as "far from concrete" but acknowledged a partnership of the sort was a credible prospect, the report said.
Final offers for Arcadia’s assets are due in the coming days. High street giants including Next are expected to be among the interested parties that may bid.
Yahoo Finance reached out to JD Sports, which declined to comment.
On Monday, JD Sports said that despite challenges due to the coronavirus pandemic, demand for its products “remained robust” in the second half of 2020, “including in the key months of November and December.”
It said it is “confident that the group headline profit before tax for the full year to 30 January 2021 will be significantly ahead of the current market expectations, which average approximately £295m ($402m). It is now anticipated that the outturn for the full year will be at least £400m.”
Meanwhile, Debenhams has said it will permanently close six stores, including its flagship branch on London’s Oxford Street, as the coronavirus pandemic ravages the retail sector.
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