Sports Direct expands its stake in Debenhams

Mike Ashley's sport clothing retailer now has an 11.2% interest in the department store's shares, after investing a further £33m

Sports Direct buys Debenhams stake
Sports Direct buys Debenhams stake

Sports Direct has acquired a further 4.6% stake in Debenhams plc.

The clothing retailer, founded by Newcastle United owner Mike Ashley, said it had spent around £33m buying the shares.

The latest move adds to a derivative trade the company made on the department store’s stock in January, after which it began to trial concessions with Debenhams, where it rents space in the department stores.

So far, four of these have opened and Sports Direct’s current interest in Debenhams shares is now effectively 11.2%

In a statement, Sports Direct said: “As previously announced, Sports Direct is already working together with Debenhams and looks forward to building this relationship.”

However, some commentators believe the share trade is bound to confuse the City.

In January Sports Direct bought a 4.6% stake in Debenhams, which it then sold at a profit before making the derivative trade days later, giving it an interest in 6.6% of Debenhams’ shares.

Sports Direct explained the switch as a “more efficient use of the company’s funds” but has not yet commented on why it had again bought shares in the retailer rather than use derivatives.

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