The source of the uplift is the news that JD. has bought out BSLA (Blacks' Leisure). As I had expressed in a previous post, JD. has a knack for mopping up the stragglers. A poster on Interactive Investor called things exactly right as far back as 25-Nov-2011:
It`s in the news this morning there is a debt crisis at Blacks Leisure. If I remember correctly, Sports Direct has 21% stake in it. Seems like the sports retailers that have over stretched themselves are in trouble. More opportunities for companies like JD with surplus cash to aquire some of these companies at fire sale prices.
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JD seem to still be very much in expansion mode. JJB was a stretch to far so I suppose Blacks is easier to swallow. No idea how many will be re-branded to JD etc... hopefully they can work their prior magic on these stores too.
Hi John,
Yeah, I think that the market is slightly missing JD's trick. They're marked JD down due to the tough retail environment, but in a way that's good, because it gives JD its acquisition opportunities.
I don't think JD is entirely risk-free, of course.
1. Richard Beddards catuions about leases is one that will haunt me.
2. They might one day make an acquisition too far. Things are currently paying off, though
3. Peter Cowgill is executive chairman of JD. He has been non-exec chairman of MBL, a company that turned out to be a right fiasco. As memory serves, there was some dodgy director dealings at MBL before the soft brown stuff hit the rotating blades - and just a general mess all around.
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