The sportswear empire of Newcastle United owner Mike Ashley said it has sold its 4.6% stake in Debenhams, snapped up only three days ago, and instead has entered into a put option agreement for a 6.6% stake in the ailing retailer.
Sports Direct International bought a share in Debenhams on Monday after the department-store chain reported a poor Christmas, hit by discounting in the sector in the run-up to the key retail trading period. Debenhams said it was open to working with Sport Direct to looks at ways to improve its operating performance.
Monday’s move had come as a surprise, as Sports Direct had not told Debenhams it would be buying a stake.
Sports Direct said it was required to transfer cash collateral to cover its obligations under the put option, and the maximum exposure is around £64m.
The sports retailer said in a statement that it was looking forward to meeting with Debenham’s senior management team in the future, and reiterated its intention to be a “supportive stakeholder and create value in the interests of both Sports Direct’s and Debenham’s shareholders.”
As well as 409 stores in the UK, SPorts Direct gas a portfolio of 28 internationally recognised sports, fashion and lifestyle brands including Dunlop, Slazenger, Everlast, Lonsdale and Karrimor.