Sports Direct, the retailer founded by Mike Ashley, has bought young fashion brand Golddigga from administration.
The sportswear discount giant is understood to have splashed out more than £500,000 to secure the Golddigga brand name, some of its stock and the forward order book from administrators Grant Thornton.
It is unclear whether Golddigga’s existing orders will be honoured but sources close to the deal told Drapers that Ashley felt buying Golddigga was too good an opportunity to miss.
One source said: "Golddigga is a key supplier to Original Shoe Co, which Ashley sold to JJB Sports at Christmas, so he’s well up on the numbers he could do with Golddigga."
Golddigga is the second high-profile fashion brand Ashley has had a hand in rescuing this year.
In April he was involved in a deal to secure the future of premium sportswear brand USA Pro, which had also fallen into administration (Drapers, April 5).
Ashley beat off stiff competition to secure Golddigga this week. Various suppliers and Golddigga founder Aaron Thalman, who left a month before the business collapsed, were also believed to have put in offers for various parts of the business.
Golddigga, which is best known for its teen fashion, had a spectacular fall from grace after being bought by private equity firm Octopus Investments for £18.5 million in October 2006. At the time of the sale, the brand had about 400 wholesale accounts in the UK and Europe and sales were believed to have been in excess of £10m.
But last month Octopus pulled the plug on Golddigga following a dramatic fall in sales. Octopus told Drapers it did not see any hope of an imminent turnaround in the UK market.
A source close to the deal said: "Octopus geared Golddigga up for massive growth and by doing so added to its overheads. At the same time Golddigga was so focused on expansion that it lost its way on product, compounding all of its problems. Fundamentally though there is still a lot there in the brand name."
Joe McLean, partner at financial services firm Grant Thornton, was the administrator. Sports Direct was unavailable for comment.