Sports Direct, headed by Newcastle United owner Mike Ashley, is moving into Australia and New Zealand.
The group, which this week presents its annual results, has announced an online partnership with OzSale.com.au, part of the MySale Group in which it acquired a 4.8% stake, worth around £15m last month.
Australia’s and New Zealand’s most successful online flash sales fashion retailer will operate the e-commerce platform as part of a new joint venture, giving Sports Direct immediate access to MySale’s 12 million members. Sports Direct’s Australian and New Zealand sites will be launched later this year and be ready to ship goods in the same month.
Sports Direct also intends to open three flagship stores in Australia and one in New Zealand, replicating its UK retail model, as well as hosting an OzSale.com.au outlet within each of the stores. It is currently working with MySale on the project and will announce a partnership with a leading Australian retail partner shortly.
Dave Forsey, Sports Direct’s chief executive, said: “We are delighted to announce this partnership with MySale, which will give Sports Direct access to the tremendous markets in Australia and New Zealand and enable customers in both countries to benefit from our quality and unbeatable value. It will be great to enter these markets, where sport is a way of life. I have been really impressed by the team at MySale and look forward to working with them.”
Jamie Jackson, MySale’s Founder and Executive Vice Chairman added: “We are really delighted with this new alliance with Sports Direct, which is one of Britain’s best and most exciting retailers. Sports Direct showed its confidence in our business when it took a 4.8% stake in us a month ago, shortly after our successful IPO. This partnership is the logical next step in the development of our relationship.”
Sports Direct looks set to report another robust set of annual results on Thursday.
The City expects the sports chain, which has around 400 UK stores and operations in 19 countries in Europe, to post underlying earnings up 13.6% to £327.1m for the year to April 14, on the back of good organic growth, acquisitions and rising online sales.
This means the firm’s existing 2011 bonus scheme, which includes 3,000 staff, will have cleared targets for three of the four years it is due to run for.
If full year underlying earnings hit £300m in 2015, shop floor staff will be awarded 34 million shares in a payout worth an average £80,000 at today’s prices. A scheme last year awarded a typical worker shares worth £68,000.
Brokers at Jefferies said strong full-year results at Sports Direct, which owns Dunlop, Karrimor and Slazenger, will act as “a reminder of the group’s attractions” after an eventful few months.
A contentious bonus scheme for founder Mike Ashley, Newcastle United Owner, was voted through earlier this month even though it was rebuffed by major shareholding bodies such as Association of British Insurers.
The plan will grant 25 million shares worth around £180m to Ashley and 3,000 other employees if profits rise sharply over four years.
Under this Sports Direct new bonus scheme, underlying earnings will have to hit £480m in 2016, £570m in 2017, £650m in 2018 and £750m in 2019.
Some shareholders are reported to be planning to vote against chairman Keith Hellawell, remuneration committee chairman Dave Singleton and other directors at the annual meeting in September because they feel the board demonstrated weak leadership over this matter which has dragged on for two years.