JD Sports Fashion PLC (LSE:JD., OTC:JDSPY) is off to Mexico, and Citi reckons the retailer has picked a promising spot to pitch up.
The FTSE 100 trainers-and-tracksuits group revealed yesterday it had signed a franchise deal with local heavyweight Grupo Axo, which will open and run JD stores and websites in the country using the JD name.
The plan, as Citi lays it out, is not exactly timid: 140 stores from 2027, or about 7% of JD-branded shops worldwide, up sharply from the 75 JD and Courir franchise outlets already dotted around the region.
The appeal is the market itself. Citi values Mexico's activewear scene at roughly $6.5 billion today, with scope to sail past $10 billion by 2034, a 5%-a-year clip helped along by a notably young population keen on their sportswear.
And JD is not going in blind. Grupo Axo already shifts product across Mexico, Chile, Peru and Uruguay through more than 8,000 points of sale, carrying 50-odd brands from Nike to The North Face to Speedo.
For JD, whose empire runs to 2,088 JD-branded stores, it is a low-risk way to plant a flag and let a local expert do the legwork.
