Mike Ashley’s Sports Direct buys Jack Wills out of administration

Sports Direct confirmed it bought the embattled fashion brand out of administration for “a cash consideration” of £12.75m – which included all of the business’ stores in the UK and Ireland as well as its stock and brand.

The brand’s administrators, KPMG, said all 1,700 staff and its distribution centre would also be transferred to Sports Direct and that its directors were “currently assessing their options for the international business”.

Jack Wills has 110 stores in the UK and Ireland as well as in Hong Kong, Singapore and the USA. It also has six franchise stores across Kuwait, Saudi Arabia and the Channel Islands and an ecommerce offering in 130 countries.

KPMG said Jack Wills had “recently experienced mounting cash flow pressures amid some of the most difficult trading conditions seen on the high street in years”.

Jack Wills had been the subject of a battle between the Ashley controlled Sports Direct and EWM since its private equity owner BlueGem put the business up for sale last month.

Ashley was considered the favourite over the weekend, but EWM put in an eleventh-hour bid for Jack Wills today to try to stop the retailer being put into administration in the first place.

Jack Wills made a pre-tax loss of £29.3m on revenues of £139.5m in its last reported year to January 31, 2018 and joins a long list of retailers that have struggled in the first half of the year.

Ashley’s acquisition of the struggling brand will likely raise eyebrows in the City, after the delayed publication of Sports Direct’s most recent annual results showed a 6% fall in group underlying EBITDA to £287.8m on sales of £3.7bn.

Ashley also said his purchase last summer of struggling department store chain House of Fraser out of administration may have been a mistake and he trailed the possibility of more store closures across its already reduced estate.