What to watch: JD Sports buys US shoe chain, silver surges to seven-year high, UK factories keep growing

LaToya Harding
·Contributor
·3 min read
CARDIFF, WALES, UNITED KINGDOM - JUNE 22, 2020 - The first shoppers enter a newly reopened JD Sports store in Cardiff city centre as some non-essential shops reopen in Wales.- PHOTOGRAPH BY Mark Hawkins / Barcroft Studios / Future Publishing (Photo credit should read Mark Hawkins/Barcroft Media via Getty Images)
JD Sports said about $100m of the purchase price would be used to repay debt. Photo: Mark Hawkins/Barcroft Media via Getty Images

Here are some of the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.

JD Sports buys US shoe chain for $495m

JD Sports (JD.L) has continued its spending spree after buying US sportswear retailer DTLR for $495m (£360m).

The deal, which is expected to be complete during the first quarter of this year, follows its acquisition of the Shoe Palace chain last month.

The company said about $100m of the purchase price would be used to repay debt.

Peter Cowgill, executive chairman at JD Sports, said that DTLR has a “deep connection” with its customers. “As such, we intend to retain the DTLR Villa fascia and its proposition.”

He added: “The acquisition of DTLR will enhance our presence in the north and east of the US and will be another important step in the group’s evolution.”

DTLR, which is majority owned by private equity firms BRS & Co and Goode Capital, currently owns 247 shops across 19 states.

Glenn Gaynor and Scott Collins, DTLR’s co-chief executives, will stay on to run the business and will reinvest part of their windfall from the sale to have a stake worth around 1.4%.

In 2018, JD Sports first pushed into the Unite States with the purchase of Finish Line.

The news sent JD Sports shares more than 6% higher in early trade, although it was still trading lower than it was at the start of last week.

Five-day look at JD stock. Chart: Yahoo Finance
Five-day look at JD stock. Chart: Yahoo Finance

Silver surges to seven-year high

The price of silver (SI=F) rocketed more than 10% to its highest since February 2013 on Monday, briefly trading over the $30 (£21) per ounce mark, as retail investors piled in on the commodity.

It became the latest target after a retail frenzy last week saw the likes of heavily-shorted GameStop (GME) and AMC Entertainment (AMC) surge in revolt to large institutional investors.

Recently amateur traders have been buying stocks and assets that Wall Street funds bet against. Similarly, traders are looking to squeeze silver shorts.

There have been thousands of Reddit posts with multiple mentions of the hashtag #silversqueeze, and a string of videos on YouTube encouraging small investors to buy the precious metal.

READ MORE: Cineworld shares surge as traders fight back against short-sellers

The surge sent silver miner Fresnillo (FRES.L) almost 20% higher in early trading in London, while Glencore (GLEN.L), BHP (BHP.L) and Anglo-American (AAL.L) also rose.

Users in the Reddit forum Wallstreetbets argued that silver is a heavily manipulated market, and a rise in the silver price could hurt large financial services companies.

"Think about the Gainz. If you don't care about the gains, think about the banks like JP Morgan you'd be destroying along the way," one Reddit user posted.

Watch: Global stocks rise after a volatile week on Wall Street

UK factories keep growing

UK manufacturers’ order books have continued to grow over the past month, despite lockdown restrictions and “unworkable” Brexit border rules hitting supply chains.

A majority of firms expanded in January, according to a closely followed purchasing managers’ index (PMI) for the sector.

The business survey is turned into headline readings on performance, with figures above 50 showing most firms report growth and below showing decline. The final figure came in at 54.1 in January, higher than the 52.9 reading suggested by preliminary figures last month.

But factories are battling major challenges, and growth was the weakest in three months.

Supplier lead times were the longest in almost three decades since the poll began. Shortages and delays pushed up raw material prices to a four-year high. Factories passed on costs, with their own prices at the highest in more than two years.

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