Northeast mini-chain could be next on Sports Direct owner’s premium hit list
Sports Direct’s Mike Ashley is believed to be on the brink of adding indie mini-chain Van Mildert to his fledgling branded fashion portfolio as he looks to replicate the success of rival JD Sports Fashion.
Ashley, who this week splashed out £7m on buying USC and designer chain Cruise from Sir Tom Hunter, is understood to be plotting to bolt on a raft of premium retail businesses to his discount-led Sports Direct to play catch-up and compete with JD’s fashion portfolio, which includes Bank, Scotts and Cecil Gee.
He is also expected to stalk premium brands, which he intends to drop into USC as an own-label offer, copying the models run by JD and Republic. He has already ringfenced £20m to invest in strengthening the new premium lifestyle division.
Ashley’s first deal is likely to see him add six Van Mildert stores and the Box Clothing and Tucci stores in the Northeast to his portfolio. More importantly, it would buy him the expertise of the retailer’s highly respected owners, Cyril and Eric Williams.
The Williams brothers already have a strong relationship with Hunter, who under the USC and Cruise deal will stay on as executive chairman. When Hunter rescued Cruise from administration in December, he brokered a deal with the Williamses in which Cyril joined the Cruise board as buying and merchandising director and Eric joined as operations director. Hunter took a small stake in Van Mildert parent company Delima in return.
Speaking exclusively to Drapers this week, Hunter said of the USC and Cruise deal: “There is no doubt consumer confidence is at an all-time low and the next couple of years will be challenging. We are treating this as an opportunity to build a bigger and better business. We now have the financial muscle to see us through the difficult times and act when opportunities pop up.”
He added: “Judge us on our actions and not on our competitors’ words. Mike [Ashley] may be a lot of things but he isn’t stupid. He is not going to put day-glo Sale posters in the windows of Cruise. The businesses will be kept independent,with strategic input from Sports Direct. We now have the firepower to go and do what we want with the opportunities [out there].”
Hunter went on to clarify that the management teams, including USC buying director Emma Alexander, would remain unchanged and that the head office would remain in Dundonald, Scotland. However, sources told Drapers that SportsDirect may appoint a chief executive to run its premium lifestyle division.
Suppliers generally welcomed the acquisition but warned that Ashley and Hunter must stay faithful to their promise that the chains’ positioning would not move. Hunter confirmed that Cruise would put more of its attention back into the so-called designer superbrands from autumn 11 while he believed USC would be better placed for the tough market with a mixture of third-party brands and acquired brands used in-house.
He added: “There is going to be a lot of change in that market [branded fashion]. There hasn’t been a lot of innovation in it for years. Brands sit back for six months [each season] and never let you repeat a winner and never let you cancel a loser.
“But we need to look at our business first of all and get that into shape.”
Hunter declined to comment on a potential purchase of Van Mildert. Van Mildert also declined to comment.