Sports Direct buys Jack Wills out of administration for £12.75m

Mike Ashley’s Sports Direct business has bought Jack Wills for £12.75m after the troubled fashion chain went into administration on Monday.

The high street giant has acquired all of Jack Wills’ stock, its distribution centre and 100 stores and employees across the UK and Republic of Ireland.

It is part of a so-called pre-pack administration deal – a buyout tactic frequently used by Mr Ashley in expanding his retail empire.

The deal was disclosed after the stock market close.

Alternative options are being considered by directors for Jack Wills’ international business, which includes stores in the US, Hong Kong and Singapore.

The company employs approximately 1,700 staff across the business and also has six franchised stores across Kuwait, Saudi Arabia, the UAE and the Channel Islands, as well as an e-commerce channel serving 130 countries.

Confirmation of Jack Wills’ sale to Sports Direct comes a day after Sky News reported that owner Mike Ashley had become the preferred bidder for the fashion group, whose owner, the investment firm BlueGem, had been seeking a buyer for the last month.

Administrators KPMG said on Monday: “Like many other retailers, the company had recently experienced mounting cash flow pressures amidst some of the most difficult trading conditions seen on the high street in years.”

Jack Wills made an annual operating loss of £14.2m for the year to 28 January 2018, and had already received more than £20m in additional funding to keep it afloat during the last year.

Sky News revealed on Friday that Sports Direct and Edinburgh Woollen Mill Group, headed by ‎rival billionaire Philip Day, were locked in a two-way fight to buy Jack Wills.

The acquisition comes a year after Mr Ashley bought the House of Fraser fashion retail chain in a pre-pack administration, again beating Mr Day to the deal.

Mr Day’s vehicle, Spectre, recently took over women’s fashion chain Bonmarche.

Will Wright, partner at KPMG and joint administrator, said: “Jack Wills has a strong brand and proud British heritage, so it is pleasing to have been able to secure this agreement with Sports Direct.”

Suzanne Harlow, Jack Wills’ chief executive, said: “For the past year, we have been focused on improving the Jack Wills proposition and the group’s financial performance.

“Despite significant progress, the challenging trading environment led us to conclude that the company’s long-term future would be best served as part of a larger group and Sports Direct will enable us to do this.”

In the last 12 months, Mr Ashley has also engineered takeovers of Evans Cycles and Sofa.com.

But his attempts to acquire Debenhams, HMV and cafe chain Patisserie Valerie were unsuccessful.

Mr Ashley’s retail empire also owns stakes in French Connection and Goals Soccer Centres.

British travel group goes into administration affecting 50,000 travellers

Two package holiday firms have collapsed, affecting more than 50,000 travellers.

Malvern Group, which incorporates Manchester-based Late Rooms and York-based Superbreak Mini Holidays, known as Super Break, has ceased trading.

The group said Super Break hotel-only holidays would be cancelled and people currently on holiday might have to pay again.

It said it “anticipated” bookings through Late Rooms would be secure.

Malvern Group said those on package holidays would be protected by the travel association Abta.

But vouchers and tickets for entertainment, attractions or the Incredible North Iceland Charter were no longer valid, it said.

Late Rooms, acting as an agent, had not taken money for bookings, which would be payable to the accommodation supplier direct, the company said.

‘Vast majority’ covered

Malvern said its contact centre had closed and it intended to appoint administrators on Friday.

It advised customers to contact Abta, their travel agent or their credit card provider for further help.

Abta has issued advice for customers of Super Break, but said it did not cover Late Rooms.

In a statement, it said the “vast majority” of Super Break holidaymakers’ arrangements would be covered through Abta, Atol or their credit card companies.

“These customers will either be entitled to a refund or, if they’ve booked through another travel company, they should contact them to discuss options which may include continuing with their booking, re-booking or alternative arrangements,” it said.

Super Break has about 250 employees and had approximately 20,000 bookings, involving about 53,000 people.

About 400 customers are currently on holiday.

Abta suggested rail, coach or Eurostar tickets might be valid for travel. Rail company LNER said it would honour all existing tickets.