Yahoo Finance Mike Ashley swoops on arch rival Dave Whelan's sports empire
Mike Ashley has swooped on arch-rival Dave Whelan's stricken fitness empire DW Sports in a £37m rescue deal to buy 46 of its gyms and 31 stores.
Mr Ashley's firm Frasers Group pounced after DW tumbled into administration at the start of August. Frasers will also get some stock, and could shell out another £6.9m for leaseholds.
The deal with Frasers - which owns House of Fraser and Sports Direct - will save 922 jobs that have been transferred to Sports Direct International, according to administrator BDO.
However, the agreement did not include the DW business name and its intellectual property. About 1,700 roles were put at risk when administrators were called in three weeks ago.
Graham Newton, a restructuring partner at BDO, said: "We are pleased to have achieved a sale of a significant part of the DW Sports business as a going concern, as this will not only secure employment for the majority of employees, but should also result in a return to the company’s creditors in due course."
Mr Ashley's rivalry with 83-year-old former Wigan Athletic owner Mr Whelan dates back two decades. In 2000, Mr Whelan reportedly told his younger competitor: "There is a club in the North, son, and you're not part of it."
Later that year Mr Ashley, 55, turned whistleblower on rivals including Mr Whelan's JJB Sports, reporting them to the Office of Fair Trading over allegations that several outlets conspired to fix the price of football shirts.
The competition watchdog issued multi-million pound fines to the retailers involved - including JJB.
Frasers said the DW deal complements its existing gym and fitness club range. The sites will be run under its Everlast brand.
It means the company now owns all or part of more than 50 brands including video game chain Game, preppy fashion business Jack Wills and luxury firm Flannels.
Mr Ashley's retail empire said last week it would plough £100m into online expansion and open stores in shopping centres in an attempt to profit from the collapse of high street rivals.
The company remains wedded to bricks and mortar at a time when many rivals are being forced to drastically reduce their retail estates, but also wants to conquer more of the digital market.
Analysts at Peel Hunt said: "Mr Ashley has a long record of buying from the administrator, but commentators have pointed out that the DW gyms... are hard to run very profitably.
"Frasers will doubtless argue that property-wise it has bought a tenner for a fiver, but the main thrust of last week's prelims was that the online strategy would be to the fore, so buying more bricks-and-mortar assets is not aligned."
DW was founded by Mr Whelan in 2009. It appointed insolvency specialists earlier this month after trading plummeted when it was forced to shut all stores and gyms during lockdown.
The company operated 73 gyms and 75 retail sites in the UK, but had already revealed plans to shut 25 stores in July.
DW made a loss of just over £20m for the 12 months to the end of March last year.
Shares in Frasers fell 1.1pc to 342p. The stock was trading above 500p before the crisis hit in mid-February.
