Sports Direct has just upped its exposure to underperforming department store chain Debenhams, buying a further £33m-worth of shares.
The move comes months after the Mike Ashley-owned retailer took its original punt on the high street business, which was ultimately converted into a put option valued at £64m.
The new investment equates to a 4.6 per cent stake, meaning Sports Direct now owns 11.22 per cent of Debenhams.
“As previously announced, Sports Direct is already working together with Debenhams and looks forward to building this relationship,” a company statement said.
This is the second time in a week Ashley has invested in an ailing retailer, after he took a punt on scandal-struck supermarket Tesco last Thursday. He also owns around 11 per cent in House of Fraser, the remainder of which is now owned by Chinese group Nanjing Xinjiekou.
But we wonder whether investors will applaud the move, given that so far his investments have not paid off and in fact have sustained a loss.
When Sports Direct took out the option in Debenhams back on January 16, the department store’s share price was 82p per share. Fast forward to today and it’s now 60p a share. That’s a 27 per cent drop.
Obviously to look at Tesco is to give a very short timeframe on an investment that he says is for the long-term, but in that time it has fallen from 195p to 178p - a decline of 8.7 per cent.
Out of interest, Sports Direct International’s share price has gone from 735p when it took the stake in Debenhams to 608p today, falling just over 17 per cent, despite some pretty strong performance from the retail business.