Sports Direct seeks OFT probe after JD wins Blacks

SPORTS Direct, which lost out to rival JD Sports Fashion after it clinched a £20m deal for Blacks Leisure, wants the Office of Fair Trading to scrutinise the sports retail and outdoor markets.

Sports Direct – founded by retail entrepreneur Mike Ashley – said it had not been able to pursue Blacks  – which was sold yesterday to Bury-based JD in a pre-pack administration – because of issues with suppliers.

It said the OFT should examine the outdoor and sports retail markets “to ensure they operate in the best interests of the consumer”.

It said the “disappointing” Blacks administration was made all the more so by the 2010 dismissal by the retailer of a 62p per share offer it made in 2010 on the grounds that the bid was “”wholly inadequate”.

Despite having to write off more than £52m Sports Direct said its own financial performance would not be impacted: “Even before yesterday’s announcement by Blacks, it had become clear that there was no value left in the Blacks shares that we held,” it added

Sports Direct also explained why it had not pursued Blacks further, and revealed that major supplier The North Face, had refused to engage with it during the process to sell the business.

It said: “During the asset sale process run by KPMG Sports Direct has looked closely at the Blacks business, always in the best interests of our shareholders.

“However, given supplier relationship issues that remain, such as The North Face who were not prepared to respond to our approaches, we could not justify a higher price for the Blacks business.”

Meanwhile the boss of JD Sports Fashion, says his company’s bid was the best for Blacks 3,500 employees.

Peter Cowgill, executive chairman of Bury-based JD told BBC 5Live: “I would say that JD being the owner of Blacks probably offers the highest prospect level for all the employees in the group.”

He warned retail landlords that JD would be seeking to renegotiate “more realistic rents” to ensure the future viability of the Blacks business.

“I think rents for a number of retailers have been a significant force in their demise. I think landlords for a number of years have over-egged it.”

Law firm Addleshaw Goddard’s restructuring team in Manchester has advised JD on the deal. The team included John Joyce, Ged Barnes, Tim Taylor and John Duffy.