Sports Division float threatened by retail gloom
Tuesday 17 March 1998
Some analysts said it looked increasingly unlikely the fast-growing group would come to the market in April or May as originally planned. This timing had been seen as auspicious with the World Cup coming up in June.
Any postponement would be a significant blow not just for the company but the whole sports goods sector, which has enjoyed a huge boom on the back of the rising popularity of brands like Adidas, Reebok and Nike.
But it is thought that sales have been slower since Christmas and the whole retail sector has been suffering from the impact of higher interest rates. Sports Division's shops have been holding big clearance sales, indicating that they have been struggling to shift unsold stock.
John Richards, at the company's broker NatWest Securities, said the timing of the float had never been stated, but said: "We will go when the market conditions are right. The timetable is not set in stone."
The company would not comment on the possibility of its float being pulled. However, a spokesman added: "Sports Division does not have an absolute requirement to float because the company can comfortably fund its aggressive expansion programme through cashflow. It can pick its moment as to when it floats."
Nick Bubb, retail analyst at SG Securities said: "If demand is slackening which may be due to changing fashion trends or the wider economic backdrop, and the supply is increasing because of the aggressive expansion plans of these companies, then that is bound to affect profitability.
"These companies sell the same stuff at the same prices and there is not a lot to distinguish one from other. The market has been uneasy for some time about the amount of new space they are adding and demand has cooled since Christmas. That is not a happy background for a big float like Sports Division."
Sports Division has more than 250 stores and was transformed by the purchase of the Olympus Sports shops from Sears in 1995. Philip Green, the former Amber Day chairman, brokered that deal and now has a 13 per cent stake in Sports Division as a result.
It is understood that when the company floats Mr Green has given an undertaking to sell his entire holding. It is possible that if the company decides to delay its float, Mr Green's stake may be acquired by the company or by institutions
Sports Division, led by the chief executive Tom Hunter, has been battling with rival sports retailers such as JJB Sports, John David Sports, All Sport and First Sport, which is part of Blacks Leisure.
It is expected to record sales of pounds 310m this year. Its financial adviser is SBC Warburg Dillon Read with NatWest Securities acting as stockbroker.
elephant appealThe first 23 lots in our charity auction have now gone. But there are 22 more still up for grabs
Jennifer Lawrence attacks mass media again over body image
scienceScientists find the answer to a question that even puzzled Darwin
A very timely Great Train Robbery and a frantic 24 Hours in A&E among the highlights
scienceThe new development in bio-printing technology could be used in the future to restore lost vision - though years of research still await
Geoffrey Macnab: The Wolf of Wall Street's account of white-collar excess is A Rake’s Progress on steroids
arts + entsThe 'Friends' actor on his new role as campaigner on addiction issues
Sun will 'flip upside down' within weeks, says Nasa
Colin Farrell reveals ‘affair’ with Elizabeth Taylor: 'She was my last romantic relationship'
Children evacuated from swimming pool after prosthetic leg mistaken for paedophile
Devyani Khobragade: India-US row escalates over arrest of diplomat in New York
Peter O'Toole: Tales of the late film icon
- 1 Facebook 'self-censorship': study records when you don't post to find more ways to share
- 2 Sun will 'flip upside down' within weeks, says Nasa
- 3 ‘Why we don't have snow in Saudi Arabia’: Video captures winter fun as Middle East hit with rare blizzard
- 4 Vitamin pills are a waste of money, offer no health benefits and could be harmful - study
- 5 Children evacuated from swimming pool after prosthetic leg mistaken for paedophile
- < Previous
- Next >
iJobs Money & Business
£500 - £550 per day: Cornwallis Elt : Business Analyst Cross Border Complia...
£44999 - £60001 per annum + Benefits: Pro-Recruitment Group: A Top Tier firm i...
£50000 - £75000 per annum + benefits + bonus: Harrington Starr: Implementation...
£50000 - £65000 per annum + benefits + bonus: Harrington Starr: Project Manage...