Footasylum, which sells branded trainers and hoodies, has 70 stores. -Alamy
JD Sports, Britain's biggest sports retailer, has acquired an 8.3% stake in Footasylum, sending shares in its struggling smaller rival surging by 70%.JD Sports said it had bought the stake in the footwear and hoodie chain for investment purposes and was prepared to increase its holding to 29.9% - the maximum level permitted without triggering a bid - but that it had no intention of making an offer. The stake was acquired from one major institutional shareholder at a price of 50p a share.
Footasylum was founded in Cheshire as a single shop in 2005 by David Makin, who previously founded the more successful JD Sports chain with his business partner John Wardle in 1981. The Footasylum share price jumped 70% to 49.5p on the news but that is still sharply down on the 164p level at which the business floated in November 2017 and follows a series of profit warnings.
Footasylum, which focuses on selling branded trainers and hoodies to young people and has 70 stores, issued another profit warning in January, which it blamed on tough Christmas trading conditions that prompted it to slash prices more than expected. By contrast, JD Sports, which owns Blacks, Millets, Size and Go Outdoors, is thriving.
It upgraded its profit outlook a week later after strong Christmas sales. The FTSE 250-listed firm has been riding the athleisure boom - sportswear designed to be worn outside the gym. This has helped it avoid the collapse in fashion sales that other parts of the high street have experienced.
Footasylum is largely run and owned by the Makin family, whose combined stakes amount to 63%. Makin's daughter Clare Nesbitt is the firm's chief executive and largest shareholder, with a 20.6% stake. At the age of 30 she became the youngest boss of a listed company when she oversaw Footasylum's £171m flotation on London's junior AIM market. Her siblings, Tom Makin, the company's marketing and e-commerce director, and Amy Mason, own 19.2% and 17.2% of Footasylum, respectively. Their father holds a 6% stake.
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