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Sports Direct in legal battle over Icelandic store

Sports Direct has reportedly launched a legal claim against the wife and stepson of former Baugur boss Jon Asgeir Johannesson.

The value retailer led by billionaire Mike Ashley has filed a notice of its intention to sue Johanneson’s stepson Sigurdur Palmi Sigurbjornsson, according to The Sunday Times.

It is also suing two companies, Guru Invest and Rhapsody Investments, which are linked to Johanneson’s wife Ingibjorg Palmadottir. The claim alleges a breach of contract.

Johannesson’s family owns 60% of Sports Direct’s shop in Reykjavik, which is the most profitable store in its international portfolio. Sports Direct owns the remaining 40%.

Ashley reportedly tried to recently exercise an option to buy out the Johannesson family’s stake in the store for €100,000 (£91,400) but was rejected.

The shop is said to be worth €20m (£18.3m), with annual sales of €10m (£9.1m) and earnings of €2m (£1.8m).

The store in Iceland launched in 2012 as a joint venture between Sports Direct, Sigurbjornsson and Jeff Blue, the former banker who recently lost a lawsuit against Ashley relating to an alleged £15m deal struck in a London pub.

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