Frasers Group plans to acquire XXL Sport & Villmark, expanding its international presence.
- The group already holds a 25.8% stake in the Norwegian sports chain.
- The acquisition offer values XXL Sport & Villmark at approximately £17.45 million.
- Frasers Group aims to address XXL’s profit issues and aid in stock management.
- CEO Michael Murray emphasises Frasers’ strategic vision to help XXL overcome challenges.
Frasers Group is setting its sights on a significant expansion by planning a takeover of Norwegian sports chain XXL Sport & Villmark. As the second-largest shareholder, holding a 25.8% stake, Frasers intends to offer 10 kroner per share for the stock it does not yet own. This move values the sports retailer at around £17.45 million.
Frasers Group has expressed confidence in its ability to steer XXL through its financial difficulties. The Norwegian company has been facing challenges with profitability, largely due to issues in stock availability. Frasers believes that its extensive experience in the retail sector positions it well to support and potentially revitalise XXL’s business operations.
The group has proposed a conditional offer that hinges on successful due diligence. Should the acquisition proceed, Frasers is prepared to address stock shortages by providing up to £35 million worth of consignment stock, which XXL would only pay for upon sale. This initiative aims to alleviate XXL’s immediate cash flow issues and improve its retail offerings.
Furthermore, Frasers Group perceives the acquisition as an opportunity to integrate its products and brands into XXL’s inventory, potentially making the retail chain more appealing to consumers. The offer has been marked by a strategic vision to not only stabilise XXL’s operational challenges but also position it for future growth.
Michael Murray, CEO of Frasers Group, stated, “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.” This commitment is framed within a broader context of Frasers’ own fiscal adjustments, as the group recently lowered its profit expectations for the year by £25 million, primarily due to challenging trading conditions and declining sales.
Frasers Group’s ambitious move to acquire XXL Sport & Villmark underscores its commitment to strategic international growth despite market challenges.
