JD Sports Snaps Up Cloggs

Posted on 23 February, 2013 by Kirsten Kennedy

The recession has taken a huge toll on British businesses, with many small to medium sized enterprises crumbling under the financial strain of keeping a business afloat. Even today, many independent businesses are struggling to keep their heads above water – especially in the retail industry, where being an established high street name is no longer a guarantee of good sales performance.

In the past few years, the high street has lost a number of its staple chains which no-one expected to see the last of, including Woolworths and HMV. Many could have, or could still be, saved should investors choose to step in and make an offer to the administrators, yet in this time of economic uncertainty and low household income this is a risk that all too few are willing to take.

Cloggs casual footwear collection includes iconic brands such as Dr Martens

Fortunately for online shoe retailer Cloggs, not every chain is so hesitant when it comes to spending on an expanding empire. JD Sports Fashion has purchased the ailing retailer for an undisclosed sum and will use this recent acquisition to diversify its own online shopping division in order to appeal to a larger pool of consumers.

JD Sports will now work with suppliers including UGG, Converse, Dr Martens and Vans in order to make the latest products released by these brands available to its UK customers both online and in Cloggs’ sole UK commercial property in the Bullring shopping centre, Birmingham.

Executive chairman of JD Sports, Peter Cowgill, believes that Cloggs is a perfect fit for his fashion chain and both retail brands will complement each other in the years ahead.

He says; “The purchase of Cloggs presented a strategic opportunity for us to diversify our own online business.

“Cloggs’ casual footwear collection includes iconic brands such as Dr Martens, Fitflop, Converse, Vans and Hunter.

“We plan to invest heavily in the development of the website and work alongside these brands to develop the product range and customer base further.”

JD Sports is no stranger to buying businesses which have encountered financial difficulties, having snapped up several chains which had entered administration in a relatively short space of time. Most recently, it acquired Blacks Leisure after it succumbed to financial pressure last year in a £20 million deal.

However, before this the chain also purchased menswear specialist retailer Cecil Gee and invested in Spanish sportswear brand Sprinter, with the result that it now holds a controlling interest in the company. Today, the retailer owns multiple brands including Gio Goi, Henleys, Kooga, Sonetti and Source Lab.

Now with Cloggs joining the extensive portfolio of businesses, it is hoped that the association with so many well-known brands will allow the online retailer to flourish once again. Cloggs will remain at its base in Birmingham and the takeover deal will ensure that there are zero redundancies in both the online and commercial property based aspects of the business.

The joint administrators appointed to the Cloggs case, Lila Thomas and David Acland of Begbies Traynor, are pleased at the successful outcome of the administration process.

Ms Thomas says; “This sale has not only protected vital jobs in the retail sector, but has also provided an ambitious company with the opportunity to expand its own business and turn around the fortunes of Cloggs.

“In a year in which the headlines have already been dominated by retail failures and job losses, this is a welcome good news story for the retail sector.”

With relatively well-known companies in the retail sector apparently becoming more willing to expand their store networks and brand portfolios, it can only be hoped that yet more will emerge to take an interest in struggling high street brands. Perhaps by encouraging mergers and takeover bids, more retailers in the UK will be able to see through to the end of the difficult economic times they currently face.

Do you think that more retailers will follow in the footsteps of JD Sports and attempt to snap up brands which have entered administration, or is the risk of spending large sums of money on a failure too great for most UK businesses to take? Should JD Sports incorporate the Cloggs brand into its existing store formats, perhaps in the form of concession stands, or is keeping the business primarily as an online enterprise a wiser decision given the growing popularity of internet shopping?




One response to “JD Sports Snaps Up Cloggs”

  1. Ex Em says:

    “Cloggs will remain at its base in Birmingham and the takeover deal will ensure that there are zero redundancies in both the online and commercial property based aspects of the business” – Lie

    Over 90% of the staff were made redundant. – Fact

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