Ashley swoops on Debenhams

 
Kasmira Jefford
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MIKE ASHLEY’S Sports Direct is set to meet with the board of Debenhams after the sportswear giant made a surprise swoop on the struggling retailer and snapped up a 4.6 per cent stake.

Neither of the companies commented on when the meeting was likely to take place, but both sides said they were open to working together and exploring options.

Sports Direct, which is believed to have built up its £45m stake during the course of last week, said yesterday that the acquisition took place without the prior knowledge of Debenhams’ board.

The group said it had told the department store group of its desire “to work together” and its intention “to be a supportive shareholder”.

Analysts have suggested that Sports Direct could use its stake to negotiate selling some of its fashion brands, such as Firetrap and Kangol, in some of Debenhams’ 156 UK stores.

“This would create another revenue stream for Sports Direct and selling brands in another location other than in one’s own store would add credibility,” one analyst said, adding that he did not view acquisition as a move toward a full takeover bid by Sports Direct.

Retail analyst Nick Bubb raised fears that Sports Direct’s involvement could drag the department store group more downmarket.

Debenhams, which is still smarting after reporting disastrous Christmas trading, said it was “open minded” about working with the group to improve its performance.

Sports Direct has in the past bought stakes in sports retailers including JD Sports, JJB and Blacks Leisure, but it is the first time it has bought a significant stake in a general retailer.

Shares in Debenhams closed up more than five per cent at 85.65p.

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