Business
Investment in Joint Venture in South Korea
Investment in Joint Venture in South Korea.
About this update from Jd Sports Fashion Plc
[{"type":"text","content":"\n \nRNS Number : 8243Q JD Sports Fashion Plc 15 September 2017 \n\n15 September 2017\n \nJD Sports Fashion Plc\n \nInvestment in Joint Venture in South Korea\n \nJD Sports Fashion Plc ('JD'), the leading retailer of sports, fashion and outdoor brands, announces that, on 14 September 2017, it entered into a joint venture agreement ('JV') with Shoemarker Inc ('SMK'), a South Korean retailer of footwear, in relation to J&S Partners Inc, a company owned by SMK, which currently trades as the multibranded Hot-T fascia ('Hot-T').\n \nJD has acquired an initial 15% of Hot-T for a cash consideration of approximately £5.5 million. As part of the JV, JD has a call option, exercisable at JD's discretion, to acquire a further 35% share of Hot-T following the finalisation of Hot-T's accounts for its financial year ending 31 December 2017. It is JD's current intention to exercise this option and to re-fascia the Hot-T stores as JD. The exercise of this option would result in the consolidation of the results and net assets of Hot-T into JD's accounts. The business will continue to be operationally run by its existing management team.\n \nAdditionally, a limited number of put and call options ('Options') have been entered into by JD and SMK as part of the JV. The value of these Options will be based on the fair value of Hot-T at the time they are exercised and to the extent the exercise of any of these Options are not at the sole discretion of the Company, the fair values have been capped with the consideration payable by either JV partner for the holding of the other partner capped below 25% of JD's Gross Assets.\n \nInformation about SMK and Hot-T\n \nSMK operates two retail businesses, Shoemarker (a multi branded footwear retailer in the sporting goods sector of the market) with 114 stores in South Korea and Hot-T (a multibranded footwear retailer in the athletic specialty sector of the market) with 23 stores in South Korea and its own website.\n \nThe revenue that relates to Hot-T within the SMK business for the year to 31 December 2016 was KRW 25.5 billion (approximately £17.2 million), with a store EBITDA of KRW 3.0 billion (approximately £2.0 million), gross assets of KRW 42.6 billion (approximately £28.8 million), an operating profit (before exceptional items) of KRW 0.6 billion (approxi...