JD Sports sells off struggling fashion arm Bank

JD Sports Fashion announced the sale of its struggling fashion arm Bank on Tuesday morning, as the group aims to focus on investing and improving its sportswear labels.

The holding company, which owns Ark, Cloggs and Scotts, has disposed of Bank to a subsidiary of Hilco Capital Limited, in a deal which should result in “a substantial recovery of its intercompany loan,” according to a group statement. JD Sports added that the exact amount would be confirmed once the sale was completed, “in due course.”

Prior to the sale, Bank had recorded a pre-tax loss of 8.1 million pounds in the year ended February 1, 2014 and had gross assets of 51.7 million pounds at that date. The sale comes after JD Sports executive chairman, Peter Cowgill was said to be in talks with landlords to reduce rent rates across a quarter of Bank stores. At the time he assured that he would do whatever would be possible to improve the performance of Bank's business.

“We have decided that we must prioritise future investment in the Sports fascias and consequently we believe that the sale of Bank is in the best interests of the Group,” commented Peter Cowgill, Executive Chairman. “We shall continue to support the broadest possible range of fashion brands within the Group.”

JD Sports added that the remainder of its businesses have continued to trade in line with its expectations during the second half of their financial year. The group is set to provide its trading update in January.