On the eve of forging a retail partnership with Mike Ashley, Sir Tom Hunter intends to make use of Sports Direct’s deep pockets. George MacDonald reports

Sir Tom Hunter

After taking a bath during the recession, entrepreneur Sir Tom Hunter came back to the forefront of retail with a bang last week.

The grocer’s son from a coal mining district in the west of Scotland, who originally made his fortune by building up then selling Sports Division for £290m in 1998, is poised to play a pivotal role in creating a new business in partnership with tycoon Mike Ashley’s mighty Sports Direct.

Investment vehicle West Coast Capital, through which Hunter holds many though not all of his stakes in businesses, last week sold 80% of branded retailer USC and luxury specialist Cruise to Sports Direct.

They are relatively small chains, but indicative of big ambitions. Sports Direct has now established a premium and luxury lifestyle division and will seek to build a powerful position in that market in the same way as it has at the cheap end.

One of Hunter’s priorities as chairman of USC and Cruise, he says, will be to maintain and enhance relationships with brands. Some brand owners fear the influence that Ashley wields and wonder whether the value of their labels may be diminished through a relationship – a concern that some in fashion retail have played upon to create fear among suppliers.

“I’d be doing the same,” Hunter laughs. But he maintains such worries are unfounded – there will be no DayGlo colours and giant Sale signs in the new division’s shops.

“Judge us by our actions, not by our competitors’ words,” he advises. “My job is to communicate with the brands – Mike is not going to trash brands like Armani and Gucci.”

He has watched the growth of Sports Direct since one of Ashley’s stores opened near one of his in the early 1990s and was impressed from early on.

“Mike has built a formidable machine,” he says. “Whatever people say about him, he is not stupid and his business model is very clever.

“He strategically wanted an arm in the fashion business. We’ve been speaking over the years and it seemed an appropriate time.”

He explains: “UK retail is tough but bad times don’t last forever. I like what we can do together. Sports Direct has deep pockets and I think over the next few years there will be opportunities we can take advantage of.”

Hunter has shared in the bad times. Until 2009 he was included in the Sunday Times Rich List with a fortune estimated at more than £1bn. But he hasn’t featured since after the recession bit.

Investments in businesses as diverse as houses and garden centres took a hit. Hunter is candid about what happened. “We got into sectors that we didn’t understand,” he acknowledges. But even in retail, his business origins, there were difficulties as USC was put into administration then bought back.

“We got plenty of things wrong. But the graph doesn’t move straight up from left to right when you’re an entrepreneur – it’s been a roller-coaster. At the end, we came through – we’re a bit better educated, a bit poorer, but still here.”

Despite the difficult days, Hunter is not short of a shilling – he is conducting this interview from a yacht moored off Capri – and he has a long-standing determination to share his wealth out.

Hunter’s ambition is to give away £1bn during his lifetime and good causes as diverse as reduction of child poverty in Scotland or economic development in Rwanda.

His philanthropic ambition remains undimmed. He has given about £50m to good causes and he will be putting his heart and soul into his new retail partnership in order to give away more.

Sir Tom Hunter

Age 50

Family Married with three children. Knighted in 2005 for services to entrepreneurship and philanthropy

Other investmentsHouse of Fraser, Flying brands, eCommera