Sports Direct is planning a “multi-million investment” in Heatons’ store estate as it believes the group’s sports offer can be improved.

Heatons

  • Sports Direct plans significant spend to boost Heatons’ sports offering
  • Boss Dave Forsey brands its an “exceptional acquisition” in face of analyst doubts
  • £35m deal may not complete until next April due to regulatory hurdle

Mike Ashley’s firm has struck a £35m deal to take full control of Irish department store group Heatons by acquiring the 50% of stock it does not already own, Retail Week revealed this week.

In an update today, Sports Direct said it plans a multi-million investment in Heatons’ stores over the “first years of full ownership”, while boss Dave Forsey branded it an “exceptional acquisition”.

Heatons has 44 stores in the Republic of Ireland and 15 in Northern Ireland. Of these, 37 operate a sports department but only five of the stores is a standalone sports offering.

“The sports offering, while competitive, can be improved significantly,” a stock market statement said today.

However the deal may not complete until next April, Sports Direct said, as it has be cleared by competition regulators in Ireland.

The retailer also said that any incremental earnings from Heatons will ‎not ‎count towards its revised full-year profits target of £420m.

Industry reaction

Analysts’ reaction to the deal this week was broadly positive, but Jonathan Pritchard of Peel Hunt said it was “not the game-changer that Sports Direct has been promising”.

Sports Direct’s chief executive Dave Forsey said today: “With a couple of years of continuous investment and by allying the stores to our other sports retail operations, I think we will see this is an exceptional acquisition for our shareholders.

“The Republic of Ireland is the fastest growing economy in Europe, our closest neighbour, the only country with a land border with the UK and is a nation of sport fanatics.

“Our unique offering, when fully available, will be transformative. The Irish retail sector grew 9.3% last year with clothing and footwear growing at 12.8%, according to the Central Statistics Office, so it is a great place to be.”

Sports Direct has also recently acquired a 19% stake in home shopping group Findel, owner of the sports retail business Kitbag.