Mike Ashley’s spate of acquisitions of financially distressed retailers has cost the high street over 6000 jobs and over £1 billion in unpaid bills.
According to analysis from The Sunday Times, the Sports Direct tycoon’s method of buying up retailers in pre-pack administration deals, which means he can acquire the assets but not the debt, has come at a cost.
On the flipside, he has saved companies from complete collapse and job cuts were stemmed as a result.
The latest addition to Ashley’s expanding retail empire came last week as he bought Evans Cycles out of administration, before announcing 50 per cent of its stores would shut, leading to 650 potential job losses.
Months earlier, Ashley bought embattled department store House of Fraser out of administration for £90 million.
Although Ashley pledged to more than half the amount of store closures planned, reducing the number from 31 of its total 59 stores to around 12, around 2300 job losses are still anticipated and House of Fraser’s significant debt pile will remain unpaid.
Last year, lingerie retailer Agent Provocateur was purchased by Ashley out of administration when it reportedly employed around 600 staff.
According to Companies House, the retailer employed just 153 workers by the end of last year.
Further acquisitions of sportswear brand USC, clothing brand Firetrap, and retailer JJB Sports over the past decade have also led to nearly 2500 job cuts.
It has been widely speculated that Ashley could be considering a similar takeover of Debenhams, which posted its worst set of results in its 240-year history last month, having already amassed a near-30 per cent stake in the retailer.
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