Sports Direct’s profits plunge

Sports Direct has been left counting the cost of snapping up stakes in other firms.

Billionaire founder Mike Ashley has a track record of buying holdings in different businesses.

But the ploy came back to bite the company yesterday after it reported a near 73% slump in annual profits.

The main reason was slashing the value of its 29.7% holding in struggling Debenhams by £85.4million, whose share price fell another 3.6% yesterday. There are also concerns about rival department store House of Fraser, in which Sports Direct owns an 11.1% share.

Meanwhile, shares in Goals Soccer Centres – of which Sports Direct owns nearly 19% – crashed by a fifth yesterday. Sports Direct’s shares also fell, despite reporting healthy results for its core businesses, with group sales up 3.5% to £3.36billion in the year to April 29. 6

It recently sold its shares in Finish Line, an American footwear chain, for a reported £34m. Liam Rowley, head of strategic developments at Sports Direct, called on retailers to “work together”, adding “otherwise Amazon is going to eat us for lunch”.