Sports Direct is in “serious talks” over the acquisition of young fashion brand Bench, Drapers understands.
Mike Ashley’s sportswear firm is believed to be circling Bench, which is owned by Manchester-based brand house Americana International.
Americana is being touted by private equity owner Hg Capital as part of an ongoing strategic review of the business by corporate advisory firm Canaccord Genuity.
Estimates have previously valued the whole Americana business, which also includes Hooch, at around £100m. It was bought for £190m by Hg Capital in 2007.
Annual revenues at Americana in the year to June 30, 2012 were £125m, with a pre-tax pro_ t of £4.3m, down from £24.8m the previous year.
Sports Direct is thought to be interested in all Bench’s assets, although a deal could be struck for just the licence, and management is understood to be seeking a significant reduction in the price.
“There are some pretty serious talks going on,” one young fashion source told Drapers. Another added: “Sports Direct wants to buy the brand but the Bench owner’s valuation is too high.”
A third industry insider told Drapers the Bench acquisition fitted with the sportswear giant’s overall strategy. “They have always said they want to take on JD, plus this would make sense in the wake of the acquisition of Republic,” he added.
Another source indicated Sports Direct was one of several suitors.
Sports Direct has been adding to its stable over the past year, having bought the majority of both young fashion retailer Republic and outdoor brand Gelert out of administration, a stake in young fashion mini-chain Pulp and more than half of Austrian retailer Sport Eybl & Sports Experts and Baltic business Sportland International Group.
Earlier this week Sports Direct revealed that gross profit increased 19.4% to £199.8m and group sales rose 15.1% to £463.7m in the nine weeks to September 29.
Sports Direct and Americana declined to comment.
Ashley this week sold £106m worth of shares in Sports Direct. He sold 2.7% of the company, or 16 million shares, at 662.5p per share, and now owns 61.7% of the business. This is the second time this year the Newcastle United owner has sold shares in the company as he sold £100m in February.