Wed, 28 Dec 2016 | DIVISION SALE
Sports Direct is selling the rights to iconic British sportswear brand Dunlop as it sets its sights on becoming the “Selfridges of sports retail”.
The company says it has sold the label, known for its ‘Green Flash’ tennis trainers and tennis racquets, some of which were used by stars including John McEnroe, Steffi Graf and Martina Navratilova, to Japanese tyre company Sumitomo Rubber Industries for $137.5 million (£112 million).
It is understood that the sale is part of Sports Direct founder and chief executive Mike Ashley’s plan to push the company towards the luxury end of the high street on the back of complaints from some of its more upmarket suppliers.
Sumitomo, which already has a relationship with Dunlop having acquired its European tyre business back in the 1980s, makes tyres for passenger cars, rally cars and other vehicles, as well as sporting goods including balls, racquets, bags and shoes.
In a statement Sports Direct said the Dunlop sale was “in line” with its “stated aspiration to become the ‘Selfridges’ of sports retail including its renewed focus on its core UK business and the development of its relationships with third party brands”.
“Sports Direct's senior management team currently needs to prioritise the core UK businesses and relationships with third party brands and does not currently have the bandwidth to develop and manage international brands simultaneously.
“As such, Sports Direct intends to use the proceeds of sale from the transaction in its commitment to its third party brand relationships.”
According to the Financial Times, some of Sports Direct’s more upmarket suppliers, which could include Nike and Adidas, are concerned that their products are being sold alongside goods from ‘lower quality’ brands like Dunlop, Slazenger, Everlast and Lonsdale.
The deal, subject to merger clearance, is expected to close by the end of May next year.
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