Sept 21 - British sportswear retailer JD Sports announced a long-term franchise partnership with Mexican fashion retailer Grupo Axo to launch JD-branded stores and e-commerce operations in Mexico. The company described the move as a response to what it views as robust demand from Mexico's expanding young population.
Under the terms of the agreement, Axo will operate JD stores and the online channel in Mexico, utilising JD's brand and intellectual property. The partnership will also make use of JD's own-brand and exclusive product ranges across footwear, apparel and accessories, according to the companies' announcement.
Axo will convert its existing sneaker store footprint to operate more than 140 JD premises in Mexico, with plans to upsize stores at select locations over time to accommodate the JD assortment and customer proposition.
JD's chief executive, Régis Schultz, was quoted saying: "We see a significant opportunity to lead the category in Mexico" as the rationale for the expansion.
The deal extends JD's franchise platform, which the company said currently includes 75 JD and Courir franchise stores across Europe, the Middle East, Africa and Asia. The Mexico agreement adds a new regional market to that franchise footprint and hands day-to-day operation to a local retail partner.
The announcement comes after JD trimmed its profit outlook, citing weaker demand from its core customers - younger and less affluent shoppers - that affected its North American business in the United States and Canada. That North American market represents over a third of JD's overall sales, underlining the size of the region within the group's revenue mix.
By partnering with Axo, JD is pursuing a franchising route that leverages a local operator to manage physical stores and online sales while deploying JD's own-brand and exclusive product assortment. The agreement prioritises use of JD's intellectual property and brand across footwear, apparel and accessories in the Mexican market.
This expansion into Mexico is presented by JD as an opportunity to capture category leadership among a growing cohort of young consumers. Operational execution will be carried out by Axo through conversion and enlargement of existing sneaker-focused retail locations across the country.