Sir Tom Hunter is understood to be close to finalising a deal to sell his loss-making footwear chain Qube to JJB Sports, the company that earned him his first fortune.
The deal would mark the latest strike into the branded fashion and footwear sector by JJB Sports’ chief executive Chris Ronnie, who is gearing up for a battle with rival John David Group, which recently added the Bank chain to its portfolio.
Ronnie bought The Original Shoe Company from Sports Direct in December in an attempt to boost JJB’s presence in the fashion market. However, he is believed to have encountered difficulties securing supply because the chain traded as a discount outlet under Sports Direct. Sources told Drapers Ronnie hoped the acquisition of Qube would win back brand support because of scale.
Hunter has made no secret of his plans to divest his retail portfolio to focus on the property market and high value investments overseas. Earlier this year he sold denim chain D2 to its management team. A sale of Qube, which lost £6 million last year, would leave Hunter’s fashion retail interests as star performer Office, and branded fashion chain USC , which is in the process of a turnaround.
However, suppliers were cautious about the deal which they fear could turn the branded footwear market into a replica of the sportswear sector, in that it would be discount-driven and dominated by a handful of major players.
The head of sales at one footwear brand who contacted Drapers said: “The Original Shoe Company has lost a lot of brands and it will be interesting to see if Qube suppliers would continue with JJB. A big part of agreeing to supply Qube was connected to the fact that Hunter also owned Office.”
However, a second supplier said: “If JJB starts price cutting, then brands can’t develop if they are sold on a discounted basis. But there is some strong buying capability at Qube, so the team might be able to do something with Original Shoe Company.”
Hunter, who netted £250m when he sold his Sports Division chain to JJB in 1998, founded Qube in 2004 in Glasgow. The concept was for a mid-market branded fashion footwear chain targeting mainstream shoppers in secondary towns. However, it has struggled to find a footing in the increasingly competitive footwear sector and been saddled with hefty rents. It has 26 stores and stocks Adidas, Lacoste, Fred Perry and Babycham.
Hunter’s office declined to comment and JJB Sports said it did not comment on market speculation.