Frasers Group flexes muscles

Mike Ashley’s Frasers Group retail empire has said it will save “a number of jobs” after snapping up parts of DW Sports in a £37 million-plus deal.

The company behind Sports Direct and House of Fraser is to acquire some of the assets of DW’S gym and fitness business. It includes some of the company’s stock, but not the brand name DW, or the firm’s intellectual property.

Some 1,700 jobs were put at risk when DW Sports fell into administration at the start of the month.

“Frasers Group looks forward to elevating the gym and fitness assets acquired pursuant to the transaction under the group’s existing iconic Everlast brand, and is also pleased to have saved a number of jobs,” the group said.

The price could rise to £43.9m if Frasers also acquires some leaseholds, the buyer said.

DW appointed insolvency specialists on 3 August after its income was hit by the lockdown that forced its stores and gyms to close. It operated 73 gyms and 75 retail sites in the UK, but had already revealed plans to shut 25 stores in July.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Mike Ashley’s Frasers

Group has a track record in snapping up distressed firms and given DW Sports was a former rival to Sports Direct, it’s an acquisition that is perhaps even more appealing.

“What’s interesting is the assets purchased for an initial cash amount of £37m relate to Dave Whelan Sports Limited’s gym and fitness business rather than its retail stores.

“In the past, Mr Ashley’s rather eclectic shopping tastes when it comes to group acquisitions have raised a few eyebrows, but Frasers Group indicated the gym business will be promoted under its existing Everlast brand.

“The fitness sector is still grappling with the public’s reluctance to train indoors.”