Mike Ashley’s Frasers promises to save jobs after £37m deal for DW Sports assets
Mike Ashley’s Frasers Group has said it will save “a number of jobs” after buying parts of DW Sports for £37 million.
Frasers, which owns Sports Direct and House of Fraser, has announced that it has paid £37 million for parts of the assets of DW’s gym and fitness business, which was established by Ashley's rival and former Wigan Athletic boss Dave Whelan.
The deal 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. Ashley’s company said that it would save some of these, but did not specify how many jobs would be rescued.
“The transaction complements 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 31 March 2019, DW had gross assets of almost £195 million, and made a loss of just over £20 million.
DW appointed insolvency specialists on 3 August, 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.
At the time of the administration DW said it would wind down the retail business for good, with the remaining 50 stores set to close.
The deal confirms reports last weekend that Ashley was bidding for the business. It was believed that administrators BDO had been hoping to secure around £20m for the business and that Dave Whelan's family was considering buying the business back minus some of its liabilities. Ashley's bid put paid to those plans.
Ashley and Whelan, a former professional footballer, have been rivals for years. Whelan had previously owned a stake in JJB Sports. He sold his stake to Ashley’s associate Chris Ronnie in 2007 and formed DW Sports buying up a number of former JJB sites in 2009, after the chain went bust.
Whelan famously tried to discourage Ashley, who also owns Newcastle United Football Club as well as his burgeoning retail empire, from trying to gain a foothold in the North.
Ashley then blew the whistle on price fixing of football shirts which led to JJB being fined by the Office of Fair Trading in 2000.