Mike Ashley’s Frasers promises to save jobs after £37m deal for DW Sports assets
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Mike Ashley’s Frasers Group has said it will save “a number of jobs” after buying parts of DW Sports for £37 million.
The company behind Sports Direct and House of Fraser said it would pay £37 million for parts of the assets of DW’s gym and fitness business.
It includes some of the company’s stock, but not the brand name DW, or the firm’s intellectual property.
Around 1,700 jobs were put at risk when DW Sports fell into administration at the start of the month.
Mr Ashley’s company said that it would save some of these, but did not specify how many jobs would be rescued.
“The transaction compliments (sic) the existing gym and fitness club portfolio within the company’s group and is consistent with the group’s elevation strategy,” it said in a statement.
“Frasers Group looks forward to elevating the gym and fitness assets acquired pursuant to the transaction under the group’s existing iconic Everlast brand, and is also pleased to have saved a number of jobs.”
The price could rise to £43.9 million if Frasers also acquires some leaseholds, the buyer said.
During the year ending March 31 2019, DW had gross assets of almost £195 million, and made a loss of just over £20 million.
DW appointed insolvency specialists on August 3, after its income was hit by the lockdown that forced its stores and gyms to close.
It operated 73 gyms and 75 retail sites in the UK, but had already revealed plans to shut 25 stores in July.
Earlier this month DW said it would wind down the retail business for good, with the remaining 50 stores to close.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, said: “Mike Ashley’s Frasers Group has a track record in snapping up distressed firms and given DW Sports was a former rival to Sports Direct, it’s an acquisition that is perhaps even more appealing.
“What’s interesting is the assets purchased for an initial cash amount of £37m relate to Dave Whelan Sports Limited’s gym and fitness business rather than its retail stores.
“In the past, Mr Ashley’s rather eclectic shopping tastes when it comes to group acquisitions have raised a few eyebrows, but Frasers Group indicated the gym business will be promoted under its existing Everlast brand.”
