Sports Direct, the leading British sports retailer and wholesaler, is moving into fashion by taking over 80 percent of two British fashion retailers. For £7.0 million (€7.9m-$11.2m) in cash, Sports Direct took over control of West Coast Capital, which runs the USC chain of young fashion apparel; and Cruise Clothing, a smaller chain of upmarket fashion.

Sports Direct acquired the shareholding from Tom Hunter, an entrepreneur from Scotland and friend of Mike Ashley, the founder and largest shareholder of Sports Direct. Hunter, who has been involved with USC since 2004 and bought Cruise last December, retains the remaining 20 percent of the two fashion retailers.

Some analysts saw the move as a way for Sports Direct, which has built its business on high-volume sales of cheap products, to compete more directly with JD Sports Fashion, the British sports lifestyle retailer. Apart from JD itself, JD Sports Fashion owns several fashion banners and it recently bought another, Cecil Gee. It was reportedly one of the bidders for the Cruise chain.

Others regard the takeover by Sports Direct as an opportunistic deal to move into fashion, at a time when the dire consumer climate in the U.K. has hurt many fashion banners. Then again, some shareholders were reportedly angered by a takeover that could be seen as a helping hand to Ashley's friend Hunter. The acquisition comes less than three years after USC went through a controversial pre-pack administration deal made by West Coast Capital in December 2008, which led to the closure of 15 stores. Cruise was also in administration when it was bought by Hunter for £5 million (€5.7m-$8.0m) last December.

With 38 stores around the U.K., USC achieved a turnover of £70.0 million (€79.1m-$111.8m) in the fiscal year until the end of January. Cruise has 10 stores, mostly in Scotland, with an annual turnover in the range of £20 million (€22.6m-$31.9m). Sports Direct said it would provide a facility of up to £20 million to enable the existing management teams to develop the two companies. Two USC stores are to open in Swindon and Newbury later this year.

Sports Direct said that USC and Cruise would remain independent, under a premium and luxury lifestyle division. However, some synergies could be achieved in relationships with suppliers, since USC sells a few lifestyle ranges such as Adidas Originals.