Findel has sold football strip retailer Kitbag to Fanatics UK Holdings, a newly formed subsidiary of US licensed sports merchandise firm Fanatics.
Kitbag operates through its own online platform Kitbag.com and manages officially-licensed club or sports organisation retail outlets, including online, bricks-and-mortar stores and at events, on a white-label basis.
The £11.6m Fanatics deal will be used to pay down Findel’s bank debt and drive growth within its core businesses, Express Gifts and Findel Education.
Sports Direct majority shareholder Mike Ashley was said to be interested in acquiring Kitbag after home shopping group Findel first announced it was looking into options for the retailer’s future development in late 2014. However, in May 2015, Findel said it had decided not to sell Kitbag following a strategic review.
The following September, Sports Direct acquired an 18.9% share in Findel and unsuccessfully attempted to appoint a director to its board.
The Findel board said it believed the sale to Fanatics was in the best interests of shareholders, Kitbag’s employees and its business partners.
“The excellent strategic fit between Fanatics and Kitbag together with Fanatic’s willingness to invest in the business will provide opportunities to Kitbag that were not available under Findel’s ownership,” it said.
“We believe that this transaction represents a good outcome for all concerned,” said Findel executive chairman David Sugden. “As Kitbag builds upon its strengthened position, it will benefit from the expertise and international presence in this marketplace that Fanatics offers.”
For the year ended March 27 2015, Kitbag reported a loss before tax and exceptional items of £1.2m compared with a loss of £4.1m in 2014. After exceptional items, it made a pre-tax loss of £2.2m, against £14.9m in 2014. Sales grew by 11.7% year on year.