Mike Ashley continues to acquire brands, not only retail operations. Acting through International Brand Management Ltd. (IBML), a subsidiary of Sports World grouping all his wholesale properties, he has acquired Kangol, a well-known brand of headwear with lots of licenses for other products. He is reportedly paying £10 million (€14m-$19m) for the brand – a lot less than a previously rumored asking price of £50 million (€74m-$97m) - from August Equity Trust, a private equity fund acting on behalf of investors.
Kangol has developed many licenses lately in the areas of clothing, footwear and other products under the management of a British sporting goods industry veteran, David Heys. He knew Ashley well. Kangol hats and clothing are already featured prominently in Sports World’s stores in the UK, but the acquisition looks likely to affect the apparel licensing deal signed by Kangol last Fall with West Coast Leisure Capital for its young fashion chain, D2. That company is the property of the former Sports Division supremo, Sir Tom Hunter, who also owns Office, Qube, USC and other retail ventures in the UK.
On the other hand, Ashley will probably make heavy use of Kangol’s footwear range, licensed to FT International for the European market, as a preferred brand of brown shoes for Original Shoe Company, a chain of shoe shops that he bought recently. We understand that he wants to build it up from 58 to 200 stores in the medium term, partly by converting stores that are currently trading as Sports World or as Sports Soccer, or as Gilesport or Hargreaves, the two sporting goods retail chains that Ashley bought recently.
Company executives remain inaccessible for comment, but Ashley is also probably planning to push the Kangol brand more forcefully in other retail channels and in the international market, as he is doing with his other brands. Formed two years ago, IBML is said to have now a staff of about 30 brand managers in charge of brand development, marketing and international sales led by Justin Barnes, a former attorney. The company is responsible for the development of all the brands acquired by Ashley over the last few years including Dunlop Slazenger, Karrimor, Lonsdale or No Fear (the list is longer). All these brands have a prominent place in Ashley’s Sports World and Sports Soccer stores in the UK, but IBML is said to be working hard to ensure their wider distribution in the UK and abroad.
For example Dunlop Slazenger, which had a stand at STAG’s very busy buying event a few days ago, has many cheap products featured in Sports World stores, but the company has developed higher-end product ranges for independent shops. It has also signed a deal with Reydon Sports, the UK’s biggest wholesaler, who works closely on reorders for independent stores, whether or not they are affiliated with any buying group.
The establishment of IBML and the reorganization of its marketing activities at group level may have played a role in the departure a few weeks ago of Chris Ronnie as chief executive of Dunlop Slazenger. A very well-known manager in the British sports industry, with a career including executive stints at Umbro and Diadora, Ronnie was one of Ashley’s closest aides. However he has apparently left on friendly terms and is preparing to embark on another business venture that should take off early next year.
Meanwhile Sports World is said to have decided to brand all of its new stores as Sports Direct.com, which is already the name of Sports World’s virtual store. It’s a logical move for this big discounter, which has already become the biggest sporting goods retailer in the UK. The internet is heavily used in this country by customers because of price or convenience or both for purchases of many different types of sports products, as indicated by some in-depth market research that we are carrying out all over Northern Europe.
The first Sports Direct.com opened in Harrogate, North Yorkshire in June this year and there are now a small number of other shops operating under this name including one on London’s Oxford Street. On the other hand, rumors that Ashley was about to take over a big and growing British sports and leisurewear e-tailer, M&M Direct, have been denied by its chief executive, Mike Tomkins.
Sports World re-branded itself in 2003 when it began to switch over to the Sports World banner from the original name of Sports Soccer. There is still no word on what Ashley may do with his investment in Blacks Leisure Group, in which he bought recently a 29.4 percent stake, but many observers are betting that he is going to make a bid for the company. Anyhow, he has appointed a British real estate agent, Churston Heard, to seek out suitable locations for new 15,000-square-foot units in urban and suburban locations, including shopping centers.