Sports Direct profits plummet

MIKE ASHLEY: ‘SIGNIFICANT CHALLENGES AHEAD’ FOLLOWING ACQUISITION OF HOUSE OF FRASER

DERBYSHIRE-BASED retail giant Sports Direct has seen pre-tax profits fall by more than 25% for the first half of the financial year.

The Shirebrook firm has pointed to the acquisition of House of Fraser as one of the big reasons behind the decline.

According to the figures released by the company, underlying pre-tax profits fell 26.8% to £64.4 million.

Underlying earnings excluding House of Fraser were, however, up 15.5% to £180.3 million.

There was also a 4.5% rise in total group revenue to £1.79 billion.

Sports Direct boss Mike Ashley’s involvement in House of Fraser has already led to some closures.

However, he said that while there are ‘significant challenges’ he remains determined to make it successful.

He added: “I have made my views clear that I believe the previous House of Fraser senior management team traded the business whilst it was insolvent for a long time. This Mike Ashley, boss of Derbyshire-based Sports Direct means we have significant challenges ahead in turning House of Fraser around.

“However, I genuinely believe we have acquired a fantastic opportunity and, with the efforts of Sports Direct and House of Fraser teams, and the support of the brands, local councils and landlords, we can turn House of Fraser into the Harrods of the High Street.”

In the UK sports retail side of the group, which accounts for 62% of revenue, sales were up 0.2%. This reflects its growth in online sales but a drop in store revenue echoed wider challenges nationally on the high street.

Deputy chief financial officer, Chris Wootton, said: “It’s not all sunshine and roses.”

Mr Wootton also said the group’s investments in other high street retailers, including Debenhams, French Connection and Game were ‘long-term strategic investments where we’re looking to collaborate.’

Following his acquisition of House of Fraser in August, Mr Ashley pledged to save around 47 of House of Fraser’s 59 outlets.