Sports Direct obtains a 4.6 percent stake in Debenhams

Monday, 13 January 2014
Sports Direct obtains a 4.6 percent stake in DebenhamsUK's biggest sporting goods retailer, Sports Direct, has just acquired a 4.6 percent stake in department store group Debenhams, stating that it wishes to “explore options at an operational level” and work with the department store. Sports Direct revealed that it had obtained 56.8 million shares in the department store to the London Stock Exchange on Monday morning. Debenhams shares had dropped towards the end of 2013, when the department store group issued a post-Christmas after disappointing Christmas sales, however its shares rose more than 6 percent Monday morning after Sports Direct made its announcement concerning its acquisition.

ChiefSports Direct obtains a 4.6 percent stake in Debenhams executive at Debenhams, Micheal Sharp had previously stated that due to the “extremely difficult environment” an negative impact had been made on “sales and profitability”, adding that he expects conditions to remain highly competitive in 2014.

Debenhams 'open minded' to working with Sports Direct

Debenhams has been striving to stay ahead of competitors, however weak online sales and the recent loss of its chief financial officer Simon Herrick have hit the group hard. The department store group had previously noticed Sports Direct stock and store purchases from former rival JJB Sports and state that it was “open minded” to working with the sporting goods retailer to help turn around sales.

In a press statement released today, Sports Direct also revealed that the “acquisition of shares [had] taken place without the prior knowledge of the Debenhams board of directors, but Sports Direct [had] communicated to Debenhams' board its desire to work together and its intention to be a supportive shareholder”.

Analysts have noted that Sports Direct is interested to open concession stands for a number of its fashion labels, such as Firetrap and Kangol and has been previously looking into acquiring a share in department store group House of Fraser.

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