Sports Directs takes 4.6pc stake in Debenhams

Mike Ashley's Sport Direct has taken a 4.63pc stake in Debenhams, the department store which issued a major profits warning two weeks ago after poor Christmas trading.

The country's biggest sports goods retailer said the purchase of the 56.8m shares - worth £46.3m at Debenhams closing price of 81.55p on Friday - took place "without the prior knowledge of the Debenhams board of directors".

However, Sports Direct said it had told Debenhams' board that it wants to "work together" and "its intention to be a supportive".

Sport Direct said it wished to "explore options at an operational level to work together with Debenhams to create value in the interests of both Sports Direct's and Debenhams' shareholders".

Debenhams noted the purchase and Sport Direct's intention to be a "supporting shareholder", adding: "Debenhams is open minded with regard to exploring operational opportunities to improve its performance, alongside its own existing and planned initiatives, in order to create value for all Debenhams shareholder."

Shares in Debenhams, which have fallen 28pc since the announcement, rose 4pc in early trading on Monday. Sports Direct shares dipped 0.13pc to 755.5p.

Mr Ashley controls more than 60pc of Sport Direct and serves as executive deputy chairman of the company which entered the FTSE 100 last year.

His genius was in the business model he created by buying up brands such as Dunlop, Lonsdale and Slazenger to sell alongside Nike and adidas. His strategy, in broad terms, has been to get customers through the doors by selling products from the brands he owns at cut price, and then making a margin on adidas and Nike’s products.

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