Sports Direct buys 4.6% stake in DebenhamsMonday 13 January 2014 18.33
Sports Direct, Britain's largest sporting goods retailer, has acquired a 4.6% stake in Debenhams and said it wants to explore options "at an operational level" to work with the department stores group.
Shares in Debenhams rose over 6% after Sports Direct said it had purchased 56.8 million Debenhams shares, worth £46m sterling at Friday's closing price of 81.6 pence.
"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," Sports Direct said today.
Analysts speculated that Sports Direct, controlled by billionaire Newcastle United soccer club owner Mike Ashley, was keen to establish concessions for some of its fashion brands, such as Firetrap and Kangol, in some of Debenhams' stores and would use the stake as leverage in negotiations.
Debenhams, which issued a profit warning last month after enduring poor Christmas trading and parted company with its finance director, noted Sports Direct's stock purchase and said it was "open minded" about working with the firm to improve its performance.
Prior to today's development, shares in Debenhams had lost 22.4% of their value over the last three months and over 7% over the last month.
Analysts noted Sports Direct had looked closely at acquiring department stores group House of Fraser over the last year and had in the past been active in buying stakes in other retail companies, including JD Sports, JJB Sports and Blacks Leisure, with mixed success.