Ashley’s Sports Direct grabs a slice of Debenhams

Sports Direct has snapped up a near-5 per cent stake in Debenhams, raising the possibility of the embattled department store chain selling some of the retailer’s brands in its stores.
Sports Direct owner Mike Ashley. Picture: Getty ImagesSports Direct owner Mike Ashley. Picture: Getty Images
Sports Direct owner Mike Ashley. Picture: Getty Images

Shares in Debenhams jumped 5 per cent after the sportswear empire of Newcastle United owner Mike Ashley said it wanted to explore how the groups could work together. Sports Direct’s 4.6 per cent stake is worth some £46 million, as of Friday’s closing price.

Ashley’s swoop comes after Debenhams’ shares hit a 22-month low of 71p following a New Year’s Eve profit warning, which triggered the departure of the group’s finance director two days later.

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Sports Direct admitted yesterday that it had acquired the holding without first telling the Debenhams board, but stressed its desire in a stock exchange statement to work together “and its intention to be a supportive shareholder”.

Debenhams said it was “open minded” about working with its new investor to improve its performance.

City retail analysts speculated that Ashley might be interested in establishing concessions for some of his fashion brands, such as Kangol and Firetrap, in Debenhams’ 156 UK stores. They did not view the development as placing the department store group in the takeover spotlight.

Sports Direct is understood to have looked House of Fraser last year. It has also taken stakes in other retailers such as JD Sports.