How Mike Ashley finally met his match with Adidas

With the German brand withholding Chelsea kits from Sports Direct, the two big beasts are battling to be football's super-power

Mike Ashley's Sports Direct and the German supplier Adidas are flexing their muscles in the ultimate contest to decide who holds the power over football kit sales.

Adidas is telling Sports Direct that it cannot sell Chelsea Football Club's new replica kit next year, while the UK's biggest sports retailer has put in an early protest, calling the decision "impossible to understand". To this mix can be added Mr Ashley, who also owns Newcastle United and knows a thing or two about control. He has clashed with Adidas in the past, been at the centre of replica kit disputes and prides his business on its football links.

Investors and customers alike will be interested in Adidas's decision to only sell the kits through Chelsea and Adidas stores, because if successful other companies may follow suit. Sports Direct's chief executive, Dave Forsey, said: "We don't believe with our football heritage that customers would be happy. We are still voicing our concerns to Adidas and Chelsea, telling them they are potentially alienating their supporters."

Adidas is not breaking new ground, with West Bromwich Albion and Sunderland both selling their replica kits only through the club shops. But Chelsea is a different matter; it is one of the biggest clubs in the country and the decision appears to have been made by Adidas, rather than the club.

Adidas said: "This season, we're implementing a new distribution strategy... Sports Direct continues to be an important retailer for Adidas and their customers still have the opportunity to buy a great range of Adidas products in their stores."

Negotiations are ongoing, but Mr Ashley has a colourful history with Adidas, which could go some way to explaining this latest spat.

In 2007, shortly after floating Sports Direct and cashing in £900m, Ashley went on a spending spree, buying a 3 per cent stake in Adidas for around £200m and snapping up Newcastle United. He managed to sell his Adidas shares within eight weeks, but still left some analysts and observers questioning whether a sports retailer should also own a stake in a major supplier.

At the time, Adidas was the Newcastle kit sponsor, but in 2009, after 14 years, it was dropped in favour of Puma. Another rift emerged as Mr Ashley sought to sell the naming rights to Newcastle's St James' Park stadium – much to the fury of the supporters. Adidas was the bookies' favourite to buy the rights but decided to steer clear. After a short stint as the Sports Direct Arena, the current sponsor, Wonga, renamed it St James' Park again, much to Mr Ashley's embarrassment.

Mr Ashley also has history in replica kit disputes – blowing the whistle on price-fixing among suppliers and retailers that led to fines for his rivals totalling £18.6m in 2003.

Sports Direct and JJB Sports later became the subject of another Office of Fair Trading investigation into replica kit price-fixing, but were cleared of any wrongdoing.

Anusha Couttigane, fashion consultant at retail analyst Conlumino, said: "This is a case of pride, especially with Mike Ashley's influence and ownership of Newcastle. But it does start a discussion over where the power lies. We have to remember Sports Direct is very powerful and becoming more so; it could stop stocking Adidas altogether."

Pre-tax profits at Sports Direct hit £143.1m, up 14.3 per cent, in the six months to the end of October, with sales rising 23.5 per cent to £1.35bn. The company is now in the FTSE 100 and is the largest sports retailer by some distance. However, those high numbers failed to impress the City and the shares tanked 13 per cent as expectations were missed.

As the owner of a number of brands, Sports Direct is keen to have complete control over as much of its business as possible. Its portfolio includes Dunlop, Slazenger, Lonsdale and Everlast, which means the margins can be higher and the company can choose its own licensing agreements. But in when it comes to football the power still lies elsewhere, with Nike and Adidas ruling the roost. Sports Direct can shout all it likes, but this may be one battle it cannot win.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Louis Theroux: By Reason of Insanity takes him behind the bars again
tvBy Reason of Insanity, TV review
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap
videoThe political parody genius duo strike again with new video
Sport
Seth Rollins cashes in his Money in the Bank contract to win the WWE World Heavyweight Championship
WWERollins win the WWE World Heavyweight title in one of the greatest WrestleMania's ever seen
News
news
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor