The City was put on alert today that billionaire Newcastle United owner Mike Ashley’s Sports Direct could enter more complicated bets over the share price of rival businesses, following so-called put options on Debenhams and Tesco earlier this year.
Dave Forsey, Sports Direct’s chief executive, said: “The strategic stakes are just part of a wider conversation and we look to explore possibilities. We have a history of doing them and I can’t predict the future, so we may or may not.”
In September, the company placed a £43 million bet on Tesco’s share price, which left it the option of owning a small stake in the supermarket, while a similar bet in January and November over Debenhams shares left Sports Direct with a 12.7 per cent stake in the department stores group.
Debenhams has since launched a handful of Sports Direct concessions in its stores and Tesco has said previously that it is in discussions with Ashley’s group.
It comes as Sports Direct revealed sales have jumped 6.5 per cent to £1.43 billion in the six months to October 26, with pre-tax profits over the period also growing 4.7 per cent to £143 million.
Bosses claimed that performance remained “solid” despite England’s early exit from the summer World Cup and the unseasonably warm weather to hit the UK this autumn.
Its sports division was particularly strong, with sales up by 8.3 per cent to £1.23 billion, and helped prop up a disappointing performance for its fashion stores, including USC, Republic and Flannels, which fell by 2.8 per cent to £99.9 million. An overhaul of its wholesale and licencing business also saw sales in that division drop 3.9 per cent to £102 million.
Forsey said that he expects to open 30-40 new stores in the UK next year, with up to 15 in Europe, and plans to focus on large, city-centre sites similar to its new Oxford Street store taking over the former HMV site this year.
He added that targets will be hit this year to trigger a 20 million share payout to 3000 employees, worth £136 million on today’s price, as part of the company’s bonus scheme.
However, he refused to comment on when the company plans to implement new conditions for its remaining 20,000 staff who are on zero-hours contracts, following Labour leader Ed Miliband’s declaration that Sports Direct operated Victorian working practices.Reuse content