Sports Direct completes $137.5m sale of Dunlop business
Sports Direct has completed the sale of its Dunlop business to Japan-based Sumitomo Rubber Industries for $137.5m, as part of the retailer's strategy to move upmarket.
As part of the deal, Sumitomo will grant Sports Direct a royalty free licence to continue to use the Dunlop brand for premium workwear and safety wear for Sports Direct's own retail purposes.
Sumitomo has the option to acquire these rights in the future subject to certain mechanical conditions for $12.5m. The parties will also enter into certain other commercial arrangements in relation to the supply of products to the Sports Direct core business.
Last December, Sports Direct said the deal was in line with its aspiration to become the "Selfridges" of sports retail, a reference to the high-end Oxford Street department store in central London, including its renewed focus on its core UK business and the development of its relationships with third party brands.
It said that it did not "currently have the bandwidth to develop and manage international brands simultaneously. As such, Sports Direct intends to use the proceeds of sale from the Transaction in its commitment to its third party brand relationships".
Dunlop, which operates in the UK, US, Europe, parts of Asia, and Canada, had combined revenue of £42.64m, gross assets of £41.76m and pre-tax profits of £4.06m for the year ended 24 April 2016.
Shares in Sports Direct were down 0.39% to 307p at 1405 BST.