Ashley acquires stake in Adidas

Billionaire entrepreneur Mike Ashley has acquired a 3 percent stake in German sportswear group Adidas, valued at €270 million (£183 million). The notoriously private owner of retailer Sports Direct, which raised £929 million with its partial flotation last month, has acquired the Adidas stake in his own name, as opposed to the stakes in Blacks Leisure and rival JD Sports that are in Sports Direct's name.

Ashley has stated in the past that it is his goal to create the world's biggest sports retailer. To this end, he last year acquired a 29.3 percent in the flailing outdoor wear group Blacks Leisure and also holds a 10.3 percent stake in JD Sports. He financed his current acquisition with proceeds from Sports Direct's flotation. His acquisition of the Adidas stake initially caused alarm, until it was revealed that Ashley was behind it, and not a private equity consortium. Industry experts relaxed at the news, as Adidas is too expensive for Ashley or his company and his modus operandi has never included joining forces with other investors.

The FT has speculated that Ashley may have taken a stake in Adidas to defend his business in the UK market from initiatives taken by Adidas and US rival Nike to protect their brands from discount store policies - like that of Sports Direct - which tend to cheapen the brand. The paper reported, however, that a source familiar with Ashley said the motivation was financial; he might just have felt that Adidas is undervalued and chose to strategically invest his money. Meanwhile, Adidas is unconcerned. “One would have to ask Mike Ashley himself what his motivation was,� says Jan Runau, chief corporate communications officer for Adidas. “Looking at his background, his investments have been mainly short-term. Be that as it may, his intention to create the largest sports retailer does not infringe on our business.�