Canterbury owners face rugby maul

The Australian Rugby Union is expected to announce that it is switching from Canterbury to rival brand KooGa. Photo / Getty Images

The new owners of the Canterbury sportswear brand are keen to refocus the company back on rugby, after attempts to diversify into other sports.

But a rival brand has warned of a looming shake-up in rugby, as sponsors reassess the value they get out of their spending.

British retail giant JD Sports has been reported as being keen to invest around £5 million ($12.6 million) to "breathe new life" into Canterbury's European arm, following its purchase of the brand this week for £6.5 million in cash.

The company's executive chairman, Peter Cowgill, was quoted in the British press yesterday as saying JD Sports hoped to re-employ around 50 staff made redundant as a result of Canterbury's financial problems in Europe.

It also hoped to resurrect some of its sponsorship deals, and might also consider entering new markets such as South America.

"We are just assessing specifically the ones that offer the maximum benefit to the brand and which can be justified on sound economic grounds," he told the Scotsman.

Cowgill told the Financial Times that having picked up a strong brand "relatively cheaply", he would not replicate the mistakes that got Canterbury Europe into difficulty.

JD would not "overinvest" in marketing, and would keep the brand's focus on rugby, he said.

It is understood the European arm of Canterbury owed nearly £60 million when it was placed in receivership last month.

The licence for the New Zealand and Australian arm of the business has been bought by Line 7 owner Ross Munro, and Canterbury's Australasian chief executive Scott Chapman has been keen to stress that it is business as usual here.

However, it is understood the Australasian business may be about to face a major blow.

Canterbury's contract with the Wallabies is believed to expire this month, and the Australian Rugby Union is expected to announce that it is switching to rival brand KooGa.

JD Sports will have a buck each way, as it recently bought a 48 per cent stake in KooGa.

KooGa's New Zealand licensee, Guy McPhail, said yesterday he believed the Canterbury sale could signal a "clean-up" in the sportswear sector, with too many brands competing for a slice of the business.

According to a UMR report made public this week, New Zealanders' interest in rugby has reached its lowest ebb in more than 15 years.

McPhail, whose family has a long history with the sport, said he believed rugby had problems to overcome to win back fans. Many sponsors would be keen to renegotiate their contracts after years of pouring money into the sport without necessarily getting the expected benefits.

"There just hasn't been the returns."

Established in 2000, KooGa already supplies gear for the American, Fijian and Tongan rugby teams. In Australia, it claims it is growing so rapidly it has been forced to turn away would-be clients.

McPhail said the brand had also been going from "strength to strength" here.