Companies: JD.   

John David, better known on the high street as JD Sports, has confirmed it is to acquire the sports and fashion division of troubled rival Blacks Leisure in a deal worth £53.2m. JD will pay £11m in cash and assume inter-company debts of £42.2m. It will receive Blacks' First Sport, AV and Pure Woman brands. Analysts hailed the deal as a good move for both parties. Blacks has struggled to secure a foothold in the sportswear market and has bemoaned stiff competition and 'significant margin pressure'. Following the disposal, Blacks will be free to concentrate on its core outdoor equipment businesses, namely Millets and Blacks Outdoor. JD's management expects to benefit from reduced 'purchasing, warehousing, distribution and marketing costs', as well as greater geographic coverage. Around 185 stores are likely to be kept, practically doubling the company's high-street presence. Some 100 of these are said to be in non-competing locations. At their current levels, both JD and Blacks look interesting. They trade off relatively low forward earnings multiples of 10.9 and 9.9 respectively. Blacks is by far the most speculative.

JD Sports Fashion	LSE	£99.91m	207.00p	4.50p
Click here for interactive charting
Other company articles:
Seymour Pierce - 'Retail bids are likely, but be careful'			01/03/2005
Sun and football drive sales			02/08/2004
John David Sports			03/05/2002
SmallCap Report			02/04/2002
Founders sell 13 per cent of John David			01/06/2001