Sports Direct buys close to 5% stake in Debenhams

Britain’s Sports Direct has bought close to a 5 per cent stake in Debenhams, raising the possibility of the troubled department store group selling some of the value retailer’s brands in its stores.

Debenhams shares, which hit a 22-month low of 71 pence after a New Year’s Eve profit warning, climbed as much as 6.5 per cent yesterday after Sports Direct said it had bought a 4.63 per cent stake and wants to explore how the groups can work together at an operational level.

Sports Direct’s stake, worth £46 million ($75.8 million) at Friday’s closing price of 81.6 pence, makes the Mike Ashley-controlled company the seventh-largest investor in Britain’s second-largest department store group. Analysts did not view the development as placing Debenhams in the takeover spotlight. – (Reuters)