Sports Direct Nets 5% Stake In Debenhams
The sportswear empire of Newcastle United owner Mike Ashley has bought a 4.6% stake in Debenhams - the stuggling department store chain.
Sports Direct International said the stock market purchase of 56.8 million shares, worth around £46m, was made without the prior knowledge of the Debenhams board but it hoped the pair could work together to improve its performance.
Debenhams had a troubled Christmas period.
Its chief financial officer quit the retailer just two days after it issued a New Year's Eve profits warning.
Simon Herrick had already been under pressure after asking suppliers for a discount on goods just eight days before Christmas Day in what was seen at the time as a 'Santa tax' - a move Debenhams insisted was not an attempt to boost fragile festive trading.
Its sales grew by just 0.1% on a like for like basis over its Christmas trading period but its share price rose by more than 5% in early trading in the wake of the investment - a move Debenhams said it was "open-minded" about.
Sports Direct has a history of buying strategic stakes in other retailers, most recently JJB Sports, and is the current owner of a near 12% holding in rival JD Sports Fashion.
It said today: "Sports Direct wishes to explore options at an operational level to work together with Debenhams to create value in the interests of both Sports Direct's and Debenhams' shareholders.
"This acquisition of shares has taken place without the prior knowledge of the Debenhams board of directors, but Sports Direct has communicated to Debenhams' board its desire to work together and its intention to be a supportive shareholder."
Debenhams has 240 stores in 29 countries. It said: "Debenhams notes that Sports Direct intends to be a supportive shareholder and that it wishes to explore options at an operational level to work together.
"Debenhams is open-minded with regard to exploring operational opportunities to improve its performance, alongside its own existing and planned initiatives, in order to create value for all Debenhams shareholders."
As well as 409 stores in the UK, Sports Direct has a portfolio of 28 internationally recognised sports, fashion and lifestyle brands including Dunlop, Slazenger, Everlast, Lonsdale and Karrimor.
Mr Ashley set up the business on leaving school in 1982 and was the sole owner until a stock market listing in March 2007 which netted him £929m.
The company joined the FTSE 100 last year as its value soared.
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