Sports Direct International plc (LON:SPD) is expanding into the US with the acquisition of Eastern Outfitters LLC for US$101mln in cash.
Sportswear retailer has swooped in to rescue Eastern Outfitters, the parent company of discount chain Bob’s Stores and outdoor retailer Eastern Mountain Sports, from administration after receiving approval from the Delaware Bankruptcy Court.
Sports Direct will take on the company’s 50 retail stores in the US under Bob’s Stores and Eastern Mountain Sports.
Eastern Outfitters, which filed for bankruptcy in February, posted a pre-tax net operating loss of US$26mln and gross assets of US$126mln in the year to 28 January.
Before it went into administration, Sports Direct bought the debt to prevent it from going into liquidation.
The acquisition is expected to be completed in the first half of May. Sports Direct said the deal would provide it with a “footprint in US bricks-and-mortar retail and a platform from which to grow US online sales”.
The decision to expand in the US comes a month after the company warned that it continues to believe the devaluation of the euro against the dollar will impact on its gross margin. The group said its euro-dollar exchange rate was currently hedged at US$1.46 and that it had no hedging in place for 2018.