Sports Direct toys with takeover of iconic Hamleys
Sports Direct has been linked with the acquisition of another big high-street name. Mike Ashley’s retail group has been named as one of the companies vying to take over Hamleys.
Toy retail chains The Entertainer and Smyths are other possible new owners for the world-famous store.
Hamleys has an outlet in St Davids 2 shopping centre, which is also home to a large Sports Direct store. Symths has four stores in Wales, while The Entertainer has six outlets in the country.
It is understood the current owners, C.banner International, are considering bids for the business, although, according to Sky News, formal bids for Hamleys are not due until after Christmas.
C.banner, which bought Hamleys three years ago for £100m, was linked in the summer with a takeover of House of Fraser. However, the Chinese company pulled out of the deal, which paved the way for Mr Ashley to acquire the department store.
Sports Direct took over House of Fraser and following the £90m buyout Mr Ashley declared his intention to turn it into the “Harrods of the high street”.
Sports Direct owns, has shares in or a partnership agreement with a number of high-street retail brands, such as Game, USC and French Connection. It recently took over bike chain Evans Cycles.
This week Mr Ashley’s loose tongue triggered a sell-off in both Sports Direct and Debenhams.
The tracksuit tycoon had warned November trading had been “unbelievably bad” as profits at the retailer took a hit from the acquisition of department store House of Fraser. Mr Ashley also claimed Debenhams, where Sports Direct is the largest shareholder with 29%, is on the brink of collapse as he urged the struggling retailer to accept his offer of a £40m loan to avoid a Christmas disaster.
His comments, on Wednesday, sent shares in Sports Direct down 40.9p, or 14.8%, at 235.4p and Debenhams stock ended the day 0.28p down, or 4.89%, at 5.45p.
In a latter to Debenhams’ board he wrote: “If I am sounding extremely frustrated – well, I am. We’ve seen this before with Blacks and House of Fraser. They didn’t want any help either. We don’t want to see Debenhams fail.
“It’s not in our interest to see it fail but without something changing rapidly all the shareholders risk getting wiped out.”
In the letter, Mr Ashley questions the board for refusing his offer of funding, stating: “I can’t see how our headline proposal to provide a £40m interest-free loan... could possibly be seen or portrayed as negative.”
Debenhams issued a statement saying that although it welcomed the support, the offer came with “conditions” that would impact the interests of other shareholders.
It said: “While the board does not think it could accept the proposal as presented, it has invited Sports Direct to engage as part of our broader refinancing process.”
But Mr Ashley’s letter says he is concerned the department store retailer does not have “time or history” on its side.
He said: “We’ve told you what we think. We’ve tried to be constructive. Having offered practical assistance, which you’ve turned down, we are now simply offering money.”
Debenhams, which has been hit by tough trading conditions in 2018, is planning to close 50 stores in the next five years in a bid to save costs. The move is likely to mean the loss of around 4,000 jobs as part of boss Sergio Bucher’s plans to rebrand the business as it wrestles with high rents and a move to online shopping.