Jan 13, 2016
Britain's Sports Direct buys stakes in Iconix and Dick's
Jan 13, 2016
Sports Direct, Britain's biggest sportswear retailer, said it acquired small stakes in two U.S. companies, taking its strategy of buying shares in potential partners across the Atlantic.
Sports Direct said it now held 11.5 percent of Iconix Brand Group Inc and 2.3 percent of retailer Dick's Sporting Goods Inc through a share instrument.
The group appears to want to gain exposure to the U.S. market, having previously been focused on acquisitions in Europe, where it runs 257 stores across the continent plus 455 in Britain.
"The main rationale for these stakes is to allow Sports Direct to hopefully build a relationship and develop commercial partnerships with the relevant parties," the company said in a statement on Wednesday.
Dick's operates 645 stores across the U.S., selling brands such as Nike Inc and Under Armour, while Iconix owns a portfolio of brands including "Mudd", "Joe Boxer" and "Rocawear".
For years, Sports Direct's cheap prices fueled rapid growth but investor confidence in the group, founded and majority owned by Mike Ashley, has been shaken over the last two months by allegations over the treatment of staff in Britain and a profit warning.
Shares in Sports Direct, whose founder Ashley also owns Newcastle United soccer club, traded up 3 percent to 424 pence at 0845 GMT following news of the investments. The stock had lost 44 percent of its value since the beginning of December.
Sports Direct's minority stake buying in Britain has in the past helped it open concessions in Tesco, the country's biggest supermarket chain, and department store group Debenhams.
The group has also had previous investments in key supplier and continues to own 7 percent in rival British retailer JD Sports.
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