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Half-time Hairdryer - February 2, 2011
My speculation on the JD/JJB situation
I make no bones about the fact that, as a relative newbie to the world of sports retail through SGB Sports, I don’t have the full inside scoop on what’s happening in JJB Towers.
Management changes, FSA charges, creditors baying for blood. These are some of the topics I’ve heard from across the industry. “JJB is living on borrowed time,” is the usual way the conversation ends.
Likewise, I can’t pretend to be a professor of JD Sports and its activities.
I do however, have an understanding of the situation that occurred in the mobile phone space when network operator and high street brand Orange and rival T-Mobile announced plans to merge under the later-revealed banner Everything Everywhere.
It was widely understood in the mobile space that T-Mobile was struggling and needed bailing out, while Orange was in a battle with Vodafone and O2 to dominate consumers’ hearts and minds. With the JV they both got what they wanted, although some might say the answers were superficial and artificial respectively.
What has happened since then is that T-Mobile has appeared as the youth-orientated brand with Orange more focused on value customers, at least from a very simplistic standpoint.
Will the same situation play-out with JJB and JD Sports? Could we see one take the lead as a purveyor of quality sports equipment and goods with the other focusing on value apparel?
Or will we see one merged into the other and the strongest brand become a dominant player on the high street?
Whatever happens, it’s sure to be a long and fraught road. Mergers of big corporations are always messy and complex, no matter either’s financial situation. The talks are still only in a very early stage as well, so even this comment piece is a piece of pie in the sky.
Until next time,
David Pittman, editor, SGB Sports
E: dpittman@datateam.co.uk || Twitter: @mrdavidpittman || Skype: davidpittmanreporter
