Sports Direct has snapped up a 5 per cent stake in rival JJB to help shore up the struggling sports chain.

Mike Ashley’s Sports Direct paid£3.4 million for 11.9 million new shares in JJB, which equates to 5 per cent of the company.

JJB chief executive Chris Ronnie said: “Sports Direct approached us with an offer to participate in a placing of new shares. After due consideration the board and I deemed the offer to be attractive for both parties.

“It will put JJB on a more secure financial footing and provides further flexibility for the board to take positive steps that provide stability for the group in this tough retail environment. Sports Direct have a track record of acquiring stakes in other listed companies, including JD Sports Fashion and Blacks Leisure Group. We welcome them as a shareholder in JJB.”

Last week JJB appointed former Next chairman David Jones as deputy chairman as it tries to rescue the ailing business. It also confirmed it had received an initial approach for its lifestyle chains Original Shoe Company and Qube.