Sports Direct chief Mike Ashley could buy House of Fraser
Newcastle United owner eyes up department store as Sports Direct profits rocket
MIKE ASHLEY'S Sports Direct chain has reported a 25 per cent rise in profits, thanks to the London Olympics and Paralympics, and there is growing speculation that the Newcastle United owner is about to launch a bid to take over the iconic House of Fraser department stores.
Sports Direct made pre-tax profits of £125m in the six months up until the end of October it was announced today and, according to website Drapers, Ashley is now set to embark on a "spending spree that could see him further dominate the UK fashion retail scene".
The report claims that he has already begun the process of buying House of Fraser chairman, Don McCarthy, out of the business.
One source told Drapers: "HoF has a portfolio with several stores that don't contribute anything. Don's view is that Mike can convert the unprofitable stores into Sports Direct and focus on growing the top-performing stores into a premium retail business."
It has also been suggested that HoF stores could be used as a platform for some of the other brands and retail chains acquired by Ashley.
The Guardian suggests that Debenhams and Sir Philip Green, owner of Topshop and Dorothy Perkins, may also enter the race for HoF.
If Ashley does take over the 163-year-old brand he may face the same kind of backlash he experienced when he acquired another famous London store, Lillywhites, in 2002. The shop on Piccadilly is now a branch of Sports Direct.
Ashley is also unpopular with supporters of Newcastle United, the football club he bought for £135m in 2007. There was fury among fans in 2011 when he renamed the club's St James' Park ground the Sports Direct Arena. Less than a year the stadium's original name was restored.
The Sports Direct chain, which bought several stores from failed rival JJB earlier this year, said its recent success is down to the London Games.
"There is no doubt that Team GB's outstanding performance has helped increase the awareness and popularity of sport across the UK," said chief executive Dave Forsey.