Saturday 20 January 2018

Sports Direct boosts holding in Debenhams

Newcastle United owner and Sports Direct boss Mike Ashley arrives at the High Court in London Credit: John Stillwell/PA Wire
Newcastle United owner and Sports Direct boss Mike Ashley arrives at the High Court in London Credit: John Stillwell/PA Wire

Gretchen Friemann

Sports Direct, headed by billionaire Mike Ashley, has boosted its holding in the UK department store chain, Debenhams, raising questions about the sportswear group's strategy with few in the market tipping a full-blown takeover.

Mr Ashley also controls the Heatons departments stores in Ireland and last month it emerged the Newcastle United owner approached Dunnes Stores to buy a number of the supermarket's premises as part of a wider expansion drive in the Republic.

In the wake of this latest share raid, Sports Direct's total voting rights in the struggling UK chain have increased to 21.04 pc from 20.27pc.

Ashley has amassaed his stake via a combination of share options and contracts for difference and controls direct stake of over 10pc.

However, his strategy remains unclear. Ashley has a track-record of building up stakes in rival retailer and previously snapped up stakes in JD Sports and privately-owned House of Fraser. The entrepreneur also controls a large slice of French Connection.

Despite the move, Debenhams remains a favourite target for investors to bet against with 13pc of its shares shorted, according to the UK website, ShortTracker.

Like many of its peers Debenhams has struggled to fully recover from the financial crisis amid consumers increasing preference from online shopping.

 

The same difficulties have beset the UK chain's Irish arm, which successfully emerged from examinership last year. Latest accounts for the retailer here show turnover rose 8.5pc to €181m over the 2016 financial year. However its operating loss widened over 2015, sinking to €9.3m compared to €3.24m in the previous year.

 

 

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