Published: Fri, April 21, 2017
Business | By Max Garcia

Sports direct buys two US chains in £78m debt

Sports direct buys two US chains in £78m debt

The deal was worth $101m (£78.7m), adding the Bob's Stores and Eastern Mountain Sports brands to the empire of the British retailer's owner Mike Ashley, giving it a way into the U.S. bricks and mortar retail market.

The acquired stores sell predominantly sports and casual wear, as well as outdoor and camping equipment and clothing.

Eastern filed for protection from its creditors in February.

Sports Direct said the deal for the U.S. group, which at the end of its latest financial year had $126m worth of assets under control, would provide it with a "footprint in United States bricks-and-mortar retail and a platform from which to grow USA online sales".

In the financial period to 28 January 2017, the businesses being acquired incurred a pre-tax net operating loss of $26m (£20m).

Nicholas Hyett, equity analyst, Hargreaves Lansdown said Sports Direct had managed to pick up a "bargain out of bankruptcy proceedings".

However, he added that not like some of the company's investments that are done previously the "rationale for today's deal is pretty clear".

He added: "We are rapidly losing patience with the company's lack of ability to stick to a strategy, not to mention the complete investor relations vacuum".

Sports Direct has unveiled plans to expand its operation across the Atlantic, after acquiring Eastern Outfitters for a cash deal worth $101m (£78.8m).

"We find the timing extraordinary".

Sports Direct has had a disastrous couple of years.

It also owns brand names including Slazenger, Lonsdale and Everlast.

Sports Direct now owns Eastern Outfitters' 50 retail shops in the US.

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