Mike Ashley’s Sports Direct has once again increased its stake in department store Debenhams taking its total holding to 29.7%, just beneath the 30% mandatory takeover offer threshold.
The sportswear retailer has been gradually upping its stake in the department store in the past year few years. Back in 2014 it acquired a 4.63% stake and by last March that stake had reached 13% and has been growing steadily ever since.
Until now it was not clear what its motivations were, as Mike Ashley is known to like to hold stakes in rival retailers, however today Sports Direct issued a statement to say it is keen to pursue a “strategic partnership” with the department store.
“We see huge value for both companies in a strategic partnership between Debenhams and Sports Direct,” said Liam Rowley, Head of Strategic Investments at Sports Direct.
“There are obvious synergies that can be achieved through the integration of our respective web operations. We also see opportunities to work together internationally. Importantly, there is scope for greater collaboration in the UK in order to roll out an elevated offering to consumers. We believe Sports Direct can complement Debenhams very well across the spectrum,” Rowley added.
Debenhams is in the midst of a turnaround programme, called Debenhams Redesigned, conceived by CEO Sergio Bucher. It is attempting to place in-store experience and mobile at the heart of its business but it had a tough Christmas and issued a profits warning in January. Last month it revealed it planned to cut a quarter of all store manager roles across its business.
A spokesperson told Reuters: “We continue to pursue our Debenhams Redesigned strategy, a key part of which is partnerships with other brands where there is an opportunity to improve the offer for Debenhams customers.”