Sports Direct has bought fashion firm Jack Wills out of administration, as retail mogul Mike Ashley presses on with an acquisition spree that has appeared to be backfiring badly in recent weeks.
The deal means a stay of execution for 1,700 staff working in Jack Wills’ 100 UK stores and its six franchises, including several in the Middle East.
Sports Direct’s billionaire boss has orchestrated an array of acquisitions and attempted purchases of struggling businesses in recent years, with mixed results.
The profit update was repeatedly delayed in shambolic scenes that saw the company reveal a surprise €674m (£605m) tax bill.
Ashley also owns a 19% stake in five-a-side football pitch operator Goals Soccer Centres, which is embroiled in an accounting scandal.
He has also bought struggling Game Digital, owns Evans Cycles and Sofa.com, and tried unsuccessfully to buy Debenhams and Findel, the online retail and education group.
Jack Wills will become part of a new division within Sports Direct, which said it wants to expand into “buying and building” fashion and sports brands despite its own financial travails.
Michael Murray, who is leading the division and assumes the title head of elevation as a result, 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.
Sports Direct’s first act will be to negotiate with the chain’s landlords in a bid to reduce rents, echoing moves made by dozens of retailers – including several in Ashley’s stable – to slash their costs.
Accounting firm KPMG, which was managing the administration, said the business had “experienced mounting cash flow pressures amid some of the most difficult trading conditions seen on the high street in years”.
Suzanne Harlow, chief executive of Jack Wills, 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.”
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