JJB will convert some of its smaller high street stores to the Original Shoe Company and has laid down the gauntlet to rival JD, which has bucked the trend in the sportswear market reporting strong like-for-like growth helped by its premium and fashion positioning.
JJB chief executive Chris Ronnie, who previously worked with Ashley at Sports Direct, said: "The aspirational and lifestyle end of the market, within which the Original Shoe Company operates, offers us opportunities and will allow us to access new customers and compete more effectively with other players in this area, such as JD."
The deal will shock the branded fashion sector. At the time of the Sports Direct floatation last March founder Mike Ashley said he planned to grow the Original Shoe Company chain to 250 stores.
Original Shoe Company stocks branded footwear and clothing including Ben Sherman, Henri Lloyd, Adidas Originals, Timberland, Lacoste, K-Swiss, Converse and Caterpillar.
The sale is expected to complete on January 28.
Sports Direct reports its first set of interim results tomorrow.