Go Outdoors' owner has called in administrators for the business as the effects of coronavirus piles pressure on High Street retailers.
JD Sports, which owns Go Outdoors, said the Covid-19 lockdown had brought into "sharper focus" the costs of the business, especially its lease terms.
After appointing administrators, JD Sports then bought back the firm.
The chain employs about 2,400 staff across 67 stores, specialising in camping equipment, bikes and clothes.
After appointing Deloitte as administrators, JD Sports paid £56.5m for Go Outdoors in what is known as a pre-pack administration.
The restructuring, which will also be led by Deloitte, will primarily focus on trying to renegotiate rent terms with landlords.
"The terms of the property leases in Go were extremely inflexible, with the stores having an average remaining period to lease expiry of approximately 10 years with upwards only rent reviews, many of which are fixed at rates above inflation regardless of the market rent in the location," the firm said.
JD Sports will continue to pay rent on Go Outdoor properties while the terms are being renegotiated.
How many jobs and store locations are kept will in part depend on how those negotiations turn out, it said.
"Subject to realism and flexibility in the future leases, it is the group's intention to retain the majority of Go's retail estate and preserve as many jobs as possible," it said.
JD Sports will pay Go's debts to stock suppliers and its tax liabilities, and it will honour customer returns and gift cards. All of Go's employees will transfer across to the new company on the same terms and conditions.
The Manchester-based JD Sports group bought Go Outdoors in 2016 for £112m. But the chain has been struggling in recent years, and forced store closures under the coronavirus lockdown have further exacerbated the firm's problems.
While non-essential retailers have since been allowed to reopen in Northern Ireland and England, analysts have questioned how comfortable customers will feel returning to the shops.
Compared with the same period in 2019, footfall was down 45.3% on the first day of reopening in England, according to retail analyst firm Springboard.
Several big brands have been struggling due to the lockdown measures introduced in March to stop the spread of Covid-19.
Cath Kidston, Laura Ashley and the UK arm of Victoria's Secret have all called in administrators.
Last week, Poundstretcher announced that it has launched a company voluntary arrangement, an insolvency process that allows companies to continue trading while pushing through store closures and rent cuts.
https://news.google.com/__i/rss/rd/articles/CBMiLGh0dHBzOi8vd3d3LmJiYy5jby51ay9uZXdzL2J1c2luZXNzLTUzMTUyNTY20gEwaHR0cHM6Ly93d3cuYmJjLmNvLnVrL25ld3MvYW1wL2J1c2luZXNzLTUzMTUyNTY2?oc=5
2020-06-23 19:41:02Z
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