Mike Ashley, the founder of Sports Direct, is to return 35 properties to the company and yesterday ruled out taking the sportswear retailer private after a second profits warning in three months wiped 25% off its share price. Financial Times. The Times. Daily Telegraph. The Independent. The Guardian
Sports Direct gave the warning as it presented its first full-year results after going public.
They revealed that Ashley is selling 35 properties back to the company for about £105m. Ashley retained ownership of the 35 sites, including Sports Direct’s head office, on its flotation in February. The stores pay rent of 5% of turnover of each individual store. The company said Ashley is selling back the property to ‘avoid any future conflict of interest’.
Sports Direct is worth £1bn, compared with its £2.1bn valuation when it listed in February.
The group has 414 Sports Direct stores in the UK and said it planned to open a further 40. It also intended to continue its European expansion.
The company is to trial three health and fitness clubs, which include a retail element and the roll-out of its new Original Shoe Company format, an upmarket footwear specialist. David Forsey, Sports Direct chief executive, believes there is the potential to open 250 such stores in the UK alone.
Forsey said that the group had signed a franchise deal for both Sports Direct and Lillywhites stores in the Middle East and South Africa.