Sports Direct unveiled another half of bumper profits but the question on everyone’s lips this morning was what’s happening with House of Fraser.
Chief executive Dave Forsey refused to comment on the mounting speculation that Sports Direct is in talks to buy the department store chain, however he admitted it always on the look-out for new acquisitions.
“With over £2bn revenue we’ll always be approached if anyone is looking for JV’s or acquisitions. There’s certainly plenty of opportunities,” he says.
He also made reference to the team he has around him helping him make the most of such opportunity. Former DC Advisory and Baugur boss Jeff Blue joined the sports giant this month to lead its mergers and acquisitions activity.
Eyebrows have been raised over how Ashley and Sports Direct, known for its cut-price clothes and giant branded mugs, could manage an upmarket department store. But the retailer seems to be making headway with its new “premium lifestyle” division which it created last year when it snapped up USC and Cruise.
Sales were up a whopping 150% to £56.1m and the retailer said it is seeing “the fruits of its labour” and expects a positive EBITDA performance for the year.
The fact that it is making headway with the fashion chains shows that the retailer can work well with upmarket brands. It has also acquired new personnel to manage those brand relationships.
The retailers it has acquired are in the process of moving to Sports Direct’s platforms, both across stock management and web. The sports giant is ‘best-in-class’ in terms of efficiency and that will no doubt benefit its newly-acquired division.
This bodes well for any potential House of Fraser deal, so concerns that 70% off signs could be hanging in the department store’s window if Ashley were to snap up the chain could be misguided.