Frasers Group intends to expand its global footprint by acquiring Norwegian sporting goods chain XXL Sport & Villmark.
- Frasers Group is preparing a takeover bid, valuing the Norwegian retailer at approximately £17.45 million.
- The company plans to offer 10 kroner per share, marking its strategic move as the second largest shareholder.
- XXL has experienced profitability issues due to stock availability, prompting Frasers Group’s rescue strategy.
- Frasers plans to support XXL by co-signing up to £35 million in stock, enhancing its retail offerings and easing financial strain.
Frasers Group is eyeing significant international expansion through its planned acquisition of Norwegian sporting goods chain XXL Sport & Villmark. With Frasers already holding a 25.8% stake, the company aims to buy the remaining shares at 10 kroner each, placing the retailer’s value at around £17.45 million.
Faced with the challenges of dwindling profits and stock issues, XXL has found a potential lifeline in Frasers Group. The retailer operates 85 stores across Norway, Finland, and Sweden, struggling with profitability largely due to stock shortages. Frasers believes it can leverage its industry experience to aid in XXL’s recovery.
As part of the bid, Frasers proposes a financial support strategy, co-signing up to £35 million worth of stock. This arrangement allows XXL to defer payments until the stock is sold, easing cash flow constraints and potentially revitalising its market offerings.
The announcement coincides with a period of fiscal adjustments for Frasers Group. Earlier this week, the group adjusted its profit outlook for the year by £25 million, citing tougher trading conditions following an 8.4% drop in half-year sales to £2.45 billion. Pre-tax profits also fell by 33% compared to the previous year, affected by currency fluctuations and a decrease in the Hugo Boss share price.
Frasers Group CEO Michael Murray expressed confidence in their ability to steer XXL through its financial struggles, stating, ‘Our strategic vision and industry experience position us uniquely to help XXL navigate its current challenges. We are committed to ensuring that XXL reaches its full potential.’
Frasers Group is strategically positioned to revitalise XXL Sport & Villmark amidst current economic challenges.
