Sportswear tycoon Mike Ashley is set to invest millions of pounds into an online luxury venture and further boost his indie portfolio after snapping up shares in northern-based mini-chain Pulp.
Ashley, who in 2011 splashed out £7m on an 80% stake in branded retailer USC and designer mini-chain Cruise, is understood to be ploughing “millions of pounds” into Cruise’s luxury etail arm Concept by Cruise, which was launched quietly last year.
One industry insider told Drapers: “They are looking at Mr Porter and seeing there is not much other competition in that space. Mike Ashley is putting a lot of money into it. His pockets on this are as deep as [the buyers] want them to be.”
Another source said the website, which stocks luxury and premium labels including Kenzo, Dior Homme, Nigel Cabourn and Folk, is a key focus for Ashley’s Sports Direct group, with the business hoping to take on the likes of luxury retailer Matchesfashion.com.
“With Coggles out of the market and Oki-ni being run by a French business, there is a gap in the market,” he added.
Sports Direct is also understood to have concluded a deal with young fashion retailer Pulp this week. Pulp, which has stores in Edinburgh, Glasgow, Liverpool, Manchester, Leeds and Nottingham, stocks brands such as Criminal Damage and Iron Fist.
Pulp was previously owned by branded supplier GLD Group, whose portfolio includes Kappa and Ed Hardy.
It is not known whether the deal will see Sports Direct gain total control of the business. However, sources close to the situation said in the wake of the deal Pulp will expand both its online presence and store portfolio with Sports Direct’s backing.
Marc Granditer, managing director of branded mini-chain Base Menswear, said he thought the move would be a positive one for Pulp and that he is not fazed by larger retailers buying smaller indies.
Granditer said: “[Sports Direct] understands the market and what it takes to make a successful business. I don’t see any negativity at all. The option for small retailers is to go to the wall or go cap-in-hand to the banks, but [Sports Direct] will be much more amenable.”
The owner of another young fashion retailer agreed the deal could be positive if the investment goes towards developing Pulp’s expansion strategy.
However, he added: “The problem lies where big sports retailers like Sports Direct snap up indie chains and begin to close stores and discount stock. They seem to have a monopoly on the industry at the moment; what they say goes. Heavy discounting only diminishes brands and decreases the overall value. It’s not good for the brands, retailers or the industry.”
Sports Direct declined to comment.