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Sports duo accused of indie sector ‘takeover’

Sports Direct and JD Sports Fashion are gaining a stranglehold on the indie sector through acquisitions that could choke long-term growth, indies and brands have warned.

Last week it was revealed that Mike Ashley’s Sports Direct had acquired a stake in premium indie mini-chain Flannels, boosting a portfolio that in the past year has swelled to include retailers USC, Cruise and Van Mildert, and the Firetrap brand. These businesses have a combined estimated turnover of more than £100m.

Paula Jauncey, owner of Emporio Clothing in Worcester, described the duo’s buy-up of premium indie mini-chains as “almost like a takeover” of the sector. “A worrying factor is that they have much greater buying power and are trying to locate in key areas in order to monopolise independent business.”

Both groups have ramped up the online presence of their indie chains, which is also affecting the indie market, Jauncey added.

There is also growing concern that branded suppliers will go with the biggest order and one-off stores will be left out in the cold. One industry source labelled Flannels’ acquisition as “another nail in the coffin for independents”. The source, who works for a brand agency, said: “They will be able to go into brands and demand an extra 10% or they tell them they won’t take the products.”

Simon Poole, managing director of men’s young fashion brand Luke, said he hoped it would be “business as usual”, but admitted he had some reservations. “It gives them a lot more power with regards to payment and negotiating discount,” he said.

JD Sports Fashion’s portfolio also boasts a plethora of retailers and brands including mini-chains Originals and Tessuti. Stuart Gordon, owner of menswear indie Apache in Horsham, which stocks JD Sports-owned brand Peter Werth, described the two groups as “vultures circling overhead, waiting for businesses to die”. He added: “It is no good for the high street.”

Scott Crowson, managing director of Midlands-based indies Coneys and Gere, said the situation was a “cause for concern”. “The way that they discount we can’t compete with,” he said.”Because they own the brand they go straight from factory to shop floor.”

A brand manager added: “I’m worried generally about independents because every time a business is taken over, it’s taken over by JD or Sports Direct. It’s a duopoly.”

Flannels’ managing director Neil Prosser called the deal inked last week “exciting and transformational”, although he said it would be “business as usual”.

Both Sports Direct and JD Sports declined to comment.

Readers' comments (3)

  • The free market in action. Nothing more.

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  • Remember that J.D & Sports Direct haven't exactly bought shining diamonds either (e.g brands of yesteryear such as Peter Werth, Sonneti and so forth), so it won't all be a bed of roses for them as some of these purchases will drag them down.

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  • I guess people would be happier to let these brands or businesses just close and people/suppliers lose the jobs or revenues!
    It is driven by what is happening in the markets generally and the consumer is being given the further possibility of being able to buy these brands or shop in these businesses. That is good for consumer choice.
    Not all purchases are destined to succeed either, these are businesses able and prepared to take the risk of often buying a business " sight unseen" from the administrator and could bring with it a potential for loses as well as gains.
    In business terms they have the capabilities to buy these failing brands/businesses and are brave enough to do so even in such difficult times.

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