Sports Direct aims to keep as many Jack Wills stores as possible
Sports Direct has said it aims to keep as many Jack Wills stores open as possible following its £12.75m acquisition of the troubled preppy fashion retailer.
The chain, which was bought in a pre-pack deal on Monday, operates 110 stores but some of them carry "extortionate rents" and the brand had over-reached itself in recent years, according to Sports Direct's head of elevation Michael Murray.
Murray led the acquisition of Jack Wills and told Sky News: "For the foreseeable future we will try and keep as many stores as possible, but the business has historically chased retail direct-to-consumer sales and has over-extended itself into multiple locations paying extortionate rents," he said.
"The rents in these historic locations will need to come down but we have great relationships with the landlords and we will be looking to work with them to save as many stores as we can.
"Some will have to close if we can't get the right rental deals but we believe we will be making fair offers to landlords and work collaboratively with them."
Murray defended Sports Direct against claims the company was in crisis and had embarked on a random shopping spree having, in the past year, acquired House of Fraser, Sofa.com, Evans Cycles and now Jack Wills. It also threw its hat in the ring for LK Bennett and Patisserie Valerie, while Ashley aggressively pursued Debenhams, though ultimately flailed to secure a deal.
The executive, who is one of Ashley's key lieutenants, told the broadcaster that the retail group was shaping itself for the investor and the customer of the future. Some deals would work, other not he said, and he did not rule out further buys.
"We are always opportunistic, so if opportunities present themselves where believe there is marriage value to the group we will always look at them," he said.
He admitted House of Fraser had been a tough acquisition but said the group was committed to making it work, despite Ashley having described some of the department store's problems as "terminal" while announcing the group's annual results, which had been delayed twice causing anger among the City.
Since the results, speculation has arisen that Sports Direct may close up to two thirds of House of Fraser's 59 stores but would continue with its strategy of converting a small core of them into more upscale destinations called Frasers, after one of its flagship stores in Glasgow.
Sports Direct fought off a rival bid from Edinburgh Woollen Mill group owner Philip Day to secure Jack Wills, which had been put up for sale by its private equity backer BlueGem.
The business was founded by entrepreneur Peter Williams in 1999 and was a hit among more affluent students and young consumers but had struggled in recent years as the brand lost its appeal and it attempted to expand beyond its middle class consumer base.
Having first left the business in 2013, Williams returned in 2016 in partnership with BlueGem to buy the business back from long-term investor Inflexion. However he fell out with the investor last year and was replaced by Suzanne Harlow, a former trading director of Debenhams.
The business subsequently burnt through £20m of cash injected by BlueGem and Italian investor Giorgio Girondi and the investors were no longer prepared to prop up the business. BlueGem, however, made a significant profit on its recent sale of department store Liberty to a group led by private equity house Glendower Capital.