Retail tycoon Mike Ashley’s Sports Direct has bought struggling high street brand Jack Wills out of administration for £12.75m.
Ashley won a race against British billionaire Philip Day, who owns the Edinburgh Woollen Mill Group, to snap up the “preppy” fashion retailer.
Will Wright and Chris Pole from KPMG were appointed as joint administrators this afternoon before the Jack Wills brand and its UK trading assets were immediately sold to Sports Direct.
City A.M. understands Day’s offer, which would have avoided an administration process, included £12m to pay off bank debt, a £12m working capital facility and the appointment of a new executive chairman.
All 100 stores across the UK and Ireland, the distribution centre and all employees will transfer to Sports Direct.
The company’s directors will continue to assess options for the retailer’s international business. Jack wills has stores in Hong Kong, Singapore and the US, as well as six franchises across Kuwait, Saudi Arabia, the United Arab Emirates and the Channel Islands.
Wright said: “Jack Wills has a strong brand and proud British heritage, so it is pleasing to have been able to secure this agreement with Sports Direct.”
Michael Murray from Sports Direct said: “Jack Wills has made a name for itself carving out a unique place in the minds of consumers since its launch and has today grown into one of the most recognised British fashion brands. Having taken a personal role in driving the decision to bid for this business, I am absolutely thrilled that Sports Direct was successful.”
Murray said Jack Wills will continue to operate as a separate company with its own leadership team.
Sports Direct said it will look to renegotiate rents with the landlords to “keep as many stores trading as possible”.
The embattled fashion brand had been experiencing mounting cash flow pressures in recent years as it struggled in an increasingly challenging high street environment. Jack Wills made an operating loss before exceptional items of £14.2m for the year ended 28 January 2018.
Earlier this week Sky News reported that a Sports Direct take over could result in a restructuring of the business.
Ashley has been on a retail acquisition spree and recent purchases include Evan’s Cycles and Sofa.com. However, in last week’s delayed full-year results the mogul described the problems at House of Fraser, which he also bought out of administration, as “terminal”.
Jack Wills chief executive Suzanne Harlow said: “For the past year, we have been focused on improving the Jack Wills proposition and the group’s financial performance.
“Despite significant progress, the challenging trading environment led us to conclude that the company’s long-term future would be best served as part of a larger group and Sports Direct will enable us to do this.”
Edinburgh Woollen Mill Group declined to comment.