British sportswear retailer Sports Direct (SPD.L) has increased its stake in department store chain Debenhams (DEB.L) to 29.7 percent and is seeking to extend its relationship with the firm to“a strategic partnership”, it said on Friday.
Sports Direct, controlled by founder and Chief Executive Mike Ashley, has been steadily increasing its holding in Debenhams.
Back in 2014 Sports Direct purchased a 4.63 pct stake and said it wanted to work with Debenhams at an operational level. That led to Sports Direct putting its sportswear in a handful of Debenhams’ stores.
But Sports Direct said on Friday it wanted a deeper relationship.
“We see huge value for both companies in a strategic partnership between Debenhams and Sports Direct,” said Liam Rowley, head of strategic investments at Sports Direct.
He said synergies could be achieved through the integration of both companies’ web operations and there were also opportunities to work together internationally.
“Importantly, there is scope for greater collaboration in the UK in order to roll out an elevated offering to consumers,” said Rowley.“We believe Sports Direct can complement Debenhams very well across the spectrum.”
Shares in Debenhams, which warned on profit in January after a poor Christmas, have fallen 44 percent over the last year, but were up 5 percent at 1156 GMT. Sports Direct shares were down 0.5 percent.
A spokesman for Debenhams said the firm had“an established and constructive relationship” with Sports Direct.
“We continue to pursue our Debenhams Redesigned strategy, a key part of which is partnerships with other brands where there is an opportunity to improve the offer for Debenhams customers,” he said.
Last month Sports Direct launched a 100 million pounds share buyback.
Source: Reuters.com