JJB Sports has agreed to end its merchandising deal with Rangers Football Club ahead of rival Sports Direct’s owner Mike Ashley taking a stake in the club.

Ashley, who also owns Newcastle United, has expressed an interest in acquiring a 10% stake and selling Rangers merchandise within Sports Direct. Talks are expected to take place later this week.

Rangers’ deal with JJB Sports has been in play since 2006, under which the retailer designed, developed, sourced and retailed all the football club’s merchandise. The agreement was supposed to run for 10 years.

JJB paid the club £18m upfront for the deal along with £3m per year. The termination will come as a blow to the long-suffering retailer, which had identified reviving its ailing football division as key to its turnaround plan.

It drafted in former Kitbag managing director Ray Evans last November as director of football. Evans was focussing on adding more contracts like Rangers to JJB’s business.

Rangers was acquired out of administration by Charles Green’s Sevco consortium in June.