British sportswear brand signs first franchise agreement

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JD Sports has been a household name on our high streets here in the UK since the 1980’s as a leading retailer of branded sports and leisure wear. And with a global presence in 21 territories, it may come as a surprise to some that the brand hasn’t ventured into the world of franchising before.

That’s all set to change, however, as JD Sports announced this week that it had signed its first franchise agreement, partnering with wellness company GMG, which is headquartered in Dubai and already has a portfolio of more than 500 GMG Sports stores across seven concepts. , including flagship brand Sun and Sand Sports. The ten-year franchise agreement kicks off plans to launch JD Sports stores in the United Arab Emirates, Saudi Arabia, Kuwait and Egypt, with a goal of opening between 200 and 300 stores per year over the next five years.

This may seem like an ambitious goal, but Regis Schultz, CEO of JD Sports since summer 2022, is very familiar with the Middle East market. He previously served as president of retail at Al-Futtaim Group, a major conglomerate in Dubai, and said he was convinced that selecting GMG as their first franchise partner will be key to success.

In released a statement to investors on July 3, 2003, Schultz said, “We are very pleased to close this historic deal, the first franchise agreement JD has entered into, in partnership with GMG. Throughout my own career, I have seen firsthand the tremendous untapped potential for retailers in the Middle East seen East, and I am sure that GMG – with their extensive retail expertise and a local understanding of the customer – are the best partners for us in the region.”

He also hinted that this would not be the first and only venture into franchising for the sports brand, saying: “We are excited about the opportunity to explore franchise partnerships as a path to further store growth in under-penetrated markets, leveraging the global growth phenomenon of athleisure .” as we bring our proven proposition to more customers around the world.”

This move to franchising is part of JD Sport’s “JD Brand First” strategy, which puts a firm focus on “on the core of the business and putting the JD brand first, with the goal of increasing the JD store footprint globally through new stores and partnerships.”

The Middle East has become a magnet for franchising in recent years, with many major global brands drawn to the affluent customer base that resides there, as well as the thriving tourism industry. The UAE, in particular, is considered one of the most popular shopping tourism destinations and the country’s retail industry continues its accelerated growth, with the two-and-a-half day weekend introduced in early 2002 considered one of the most important. of the contributing factors. The State of the UAE report on the retail economy Prepared by Majid Al Futtaim and based on Q4 2022 metrics and full year market trends and consumer behavior analysis, it was stated that “the longer 2.5 day weekend boosted weekend retail spending. Weekend spending increased by 11 in 2022, 3% compared to the previous year – almost 6 percentage points more than weekday spending over the same period, resulting in additional weekend retail spending of approximately AED 5.5 billion.”

Combined with that, a 2022 report from Data Bridge suggests that the sportswear market in the region is expected to grow reach a value of $23.2 million by 2029, with a compound annual growth rate (CAGR) of 4.8% fueled by an increased interest in health and wellness following the pandemic. All factors that should therefore give JD Sports a sporting chance of success in their first franchise partnership.