Sports Direct buys two retailers in Austria and Baltics
Mike Ashley’s Sports Direct has stepped up its plans to conquer Europe by acquiring two retailers in Austria and the Baltics.
The two deals extend the presence of Britain’s biggest sportswear retailer to 16 European countries and throw down the gauntlet to the French giant Decathlon, which has 14 UK stores. Industry experts firmly believe that the two retail groups will dominate the European market over the next decade.
Sports Direct already has stores in countries including Belgium, Slovenia, Portugal and France and has previously said it wants to be in all the countries that have adopted the euro inside five years.
The group, which Newcastle United owner Ashley founded from a single shop in 1982, has agreed to acquire a 51 per cent stake in Sports Eybl & Sports Experts (EAG). The UK chain could eventually shell out €61m (£52.3m) to buy Austria’s biggest retailer of sports goods. The deal comprises an initial payment of €10.5m to EAG shareholders and Sports Direct providing it with a €30m debt facility.
Sports Direct has the option to buy the Austrian retailer’s remaining shares for €15.5m over the next five years, with a further €5m up for grabs.
The sum it has paid to acquire 60 per cent of Sportland International Group, the biggest sports specialist in the Baltics, was not disclosed. SIG operates the retailers, including Sportland and Sportland Outlet, in Estonia, Latvia and Lithuania. The two acquisitions only have limited crossover with the stores of Decathlon, which has nearly 550 shops globally, but it highlights the land grab by both chains in Europe.
The acquisitions reinforce the growing might of Sports Direct, which has 400 UK stores. It has seen its share price rise at a rate akin to a technology stock during the boom years and is tipped for entry into the FTSE 100.
Its shares closed at 511.5p yesterday to give it a market capitalisation of £3.1bn, which is a country mile away from its lowly value in December 2008, when it had a share price of just 32p.
Dave Forsey, the chief executive of Sports Direct, said: “Expected benefits from these investments include increased scale for our international business, growing international awareness of our group brands and additional expertise in specialist product categories such as winter sports.”
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