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
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
Attenborough with the primates
tvWhy BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
News
Kelly Osbourne will play a flight attendant in Sharknado 2
people
News
A bartender serves beers
news
Arts and Entertainment
Daniel Craig and Rory Kinnear film Spectre in London
film
Life and Style
The finale at Dolce and Gabbana autumn/winter 2015
fashion
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

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003
Barbara Woodward: Britain's first female ambassador to China intends to forge strong links with the growing economic superpower

Our woman in Beijing builds a new relationship

Britain's first female ambassador to China intends to forge strong links with growing economic power
Courage is rare. True humility is even rarer. But the only British soldier to be awarded the Victoria Cross in Afghanistan has both

Courage is rare. True humility is even rarer

Beware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Alexander McQueen: The catwalk was a stage for the designer's astonishing and troubling vision

Alexander McQueen's astonishing vision

Ahead of a major retrospective, Alexander Fury talks to the collaborators who helped create the late designer's notorious spectacle
New BBC series savours half a century of food in Britain, from Vesta curries to nouvelle cuisine

Dinner through the decades

A new BBC series challenged Brandon Robshaw and his family to eat their way from the 1950s to the 1990s
Philippa Perry interview: The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course

Philippa Perry interview

The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course
Bill Granger recipes: Our chef recreates the exoticism of the Indonesian stir-fry

Bill Granger's Indonesian stir-fry recipes

Our chef was inspired by the south-east Asian cuisine he encountered as a teenager
Chelsea vs Tottenham: Harry Kane was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope

Harry Kane interview

The striker was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope
The Last Word: For the good of the game: why on earth don’t we leave Fifa?

Michael Calvin's Last Word

For the good of the game: why on earth don’t we leave Fifa?