Mike Ashley’s Sports Direct has bought the UK business of Jack Wills, the preppy fashion chain popular with well-heeled undergraduates, out of administration for £12.75m.
KPMG were appointed administrators of Jack Wills on Monday and immediately sold the UK business and assets to Sports Direct, which acquired House of Fraser and Evans Cycles via a similar process. All of Jack Wills’ UK employees have transferred to Sports Direct as a result.
Options for the international business, which includes stores in the Far East, the US and the Middle East, are still being assessed.
“Jack Wills has a strong brand and proud British heritage, so it is pleasing to have been able to secure this agreement with Sports Direct,” said Will Wright, partner at KPMG and joint administrator.
Michael Murray, head of elevation at Sports Direct, said Jack Wills would continue to operate as a separate company with its own leadership team. “Our role will be to support the business and help elevate the brand and help restore it to its former glory,” he said.
Suzanne Harlow, the former Debenhams director who was appointed chief executive of Jack Wills last year, said that despite progress made improving the proposition and financial performance, “the challenging trading environment led us to conclude that the company’s long-term future would be best served as part of a larger group”.
Philip Day, the Dubai-based billionaire whose UK retail interests include Edinburgh Woollen Mill and Jaeger, is understood to have submitted a rival bid of a similar amount. A spokesman for Mr Day declined to comment on the outcome.
The acquisition is likely to prompt further criticism of Mr Ashley and his team from those who believe such acquisitions are a distraction from the core Sports Direct business.
House of Fraser, acquired last year, has so far lost more than £50m while among Sports Direct’s strategic investments. Debenhams, in which Sports Direct held a stake, went into administration before being acquired by its creditors and Goals Soccer Centres, another investment, faces being delisted after an accounting scandal.
Mr Ashley defended the “scattergun” strategy again at its recent results presentation, saying that one or two big winners easily offset the costs of the losers.
The first Jack Wills store was opened in Devon in 1999 by Peter Williams, who set up the company along with Robert Shaw.
It grew rapidly by building a dedicated following among upper middle class teenagers and students, using catalogues and social media to increase loyalty. By 2010 it was expanding overseas and was talked of as a candidate for a stock market flotation.
Mr Williams resigned in 2013, only to return two years later. Last year, he left again after disagreements with Jack Wills’ new owners BlueGem over strategy.
In the year to January 2018, the last for which accounts are available, sales fell slightly and gross margins dropped five percentage points. The company has required cash injections in recent years; the latest refinancing involved HSBC, BlueGem and GGG, an Italian investment house, providing additional debt and equity.
Many of Jack Wills’ 100 UK and Irish stores are located in expensive university and market towns such as Oxford, Cambridge, Bath, York, Winchester, Cheltenham and Marlborough. But it has not followed other retailers such as Monsoon and Debenhams in using a company voluntary arrangement to seek relief from its creditors.
Mr Murray, whose remit at Sports Direct includes property, said that the company “will look to work with the landlords to reduce the rents to keep as many stores trading as possible”.
He added that Jack Wills will fall under a new division established at Sports Direct which will focus solely on buying and building fashion and sports brands.
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