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Sports Direct fumes after Blacks sale

by LLB Editor
10th Jan 12 12:59 pm

Sports Direct has revealed its disappointment over the sale of Blacks Leisure.

The sports retailer, which was founded by Newcastle FC owner Mike Ashley, has called for an Office of Fair Trading (OFT) investigation after its rival JD Sports Fashion secured the deal for £20m on Monday.

The firm, which had its own bid for Blacks dismissed as “inadequate” in 2010, also alleged that it was unable to offer a higher price for Blacks after suppliers, including The North Face, failed to answer phone calls to confirm they would supply Blacks under Sports Direct ownership. The North Face was not immediately available for comment.

Blacks had earlier appointed KPMG as administrator after falling into difficulties and struggling to find a buyer on its own. The JD Sports buyout, which was announced on Monday night, covers all of Blacks’ 290 stores and protects 3,500 jobs in a pre-pack administration deal. Along with Sports Direct, Dragons’ Den star Peter Jones and outdoor retailer Trespass were among the beaten bidders.

JD Sports executive chairman Peter Cowgill has outlined how he hopes this is the first step to restoring Blacks to a market-leading position. Under the terms of the agreement brands such as Eurohike and Peter Storm will transfer to the Bury-based sports retailer, while debts of £30m will be scrapped.

But following the deal, Sports Direct wants the OFT to investigate the sports retail and outdoor markets to determine whether they are acting in the best interests for consumers. The Derbyshire-based retailer, which was the largest shareholder at Blacks with a stake of around 22.5 per cent before the firm went into administration, has a fractious history with the outdoor specialist.

This includes the failed bid of 2010, along with Sports Direct turning down appeals for equity fundraising on a number of occasions.

Despite its calls for an immediate investigation into the deal won by JD Sports – whose largest shareholder is Berghaus owner Pentland Capital – Sports Direct has said the loss of share value will not have an effect on the business, including its bonus share scheme targets.

Pre-pack administration sales can often spark controversy because creditors are not given the chance to vote against the asset sale taking place.

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