Sports Direct acquires 7.9% stake in US sport retailer Finish Line
today Apr 19, 2017
Sports Direct is busy shopping for retail brands. After recently purchasing British lingerie label Agent Provocateur, Mike Ashley's UK-based group has now invested on the other side of the Atlantic. Between 30th March and 13th April, the sport and fashion distribution giant has purchased nearly 3.2 million shares in Finish Line, according to the documentation registered with the US stock exchange regulatory authorities. The operation gives Sport Direct a 7.9% stake in the group, a major player in sporting goods distribution in the USA.
Sports Direct International has been busy acquiring minority stakes in sport and fashion names since 2014, among them Findel, French Connection and Mysale. But the group's most significant moves involved acquiring an interest in UK consumer goods distribution goliaths Tesco and Debenhams. For the time being however, Sport Direct's senior management has not taken an active role in their businesses.
Buying a stake in a major US sport goods retailer is no trivial matter, as Sports Direct has become the fifth-largest shareholder for Finish Line. Still, given the fraught situation of brick-and-mortar retailing in general in the USA, it is hard to find a clue to the strategic drivers for the operation, and Sports Direct’s management has not commented on this yet.
In the fiscal year closed at the end of February, Finish Line posted a 2.5% sales rise, reaching $1.84 billion (€1.73 billion), though comparable sales only grew by 0.3%. Operating income instead rose from $42 million to $54 million. The group currently operates 950 retail outlets, between its directly owned stores and a presence inside Macy's department stores.
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