Notice lodged to appoint administrators for Go Outdoors JD Sports has confirmed weekend press speculations that it is considering strategic options for the future of Go Outdoors, and that,as part of those options, the Group has lodged a notice in Court to appoint administrators. We are not surprised as JD has struggled to build a profitable Outdoor business ever since it acquired Black/Millets from administration back in 2012. The pandemic has not helped the situation with the timing of store closures during lockdown resulting in Go Outdoors missing the key camping season from an annual profit perspective. In addition, with quarterly rent day being June 24th, we would expect a number of other retailers to be looking at similar strategic options in an attempt to create a viable profitable business long term. JD Sports acquired Go Outdoors at the end of FY17 for £112m, hoping that the added scale the business would give the combined Black/Millets/Tiso business would help create a profitable Outdoor division. This failed to materialise. We forecast a fourth year of deteriorating performance in FY21E. The Outdoor division reporting a loss of £4.3m in FY19 versus a profit of £8.8m in FY18. Having reported a 1H20 loss of £18.2m, we forecast a loss of £17m for FY20E and £24.5m in FY21E. Outdoors is a notoriously difficult category in which make money as it is very weather dependent, but also highly promotional with aggressive online propositions. Next news - FY20 results to the end of January, due 7th July Ultimately, from a Group profit perspective, the Outdoor division is dwarfed by the Sport Fashion division, which remains the driver of Group growth. Whatever decision management takes on the future of Go Outdoors, it is unlikely to materially impact our forecasts. We believe JD Sports is well positioned with its market-leading, multi-channel proposition to quickly resume its historic double-digit growth trajectory. Anecdotal evidence from other retailers suggest that the loungewear/athleisure category has held up well during lockdown. We expect the athleisure market to rebound relatively quickly following months of customers being cooped up and, from their recent updates, we do not expect Nike (NR) or Adidas (NR) to flood the market with surplus stock. Next news is Nike Q4 earnings on June 25th with JD Sports FY20 results on July 7th.