Sports Direct in £7m retail acquisition
Sports Direct has agreed a £7m deal to become the majority shareholder of fashion retailers USC and Cruise Clothing. Mansfield-based Sports Direct has taken 80 per cent of the shares in the cash deal, with retail tycoon Sir Tom Hunter keeping hold of the remaining ownership.
Under the terms of the deal, Sports Direct will provide funding of up to £20m to enable the existing management teams to develop the two businesses.
USC is the trading name of West Coast Capital, which manufactures branded clothing. Cruise Clothing is a luxury brand retailer.
Kilmarnock businessman Sir Tom Hunter pumped more than £8m into the USC brand last year in a bid to pay off the company's debts.
He has been involved with USC since 2004 and he purchased Cruise in December 2010. Sir Tom will continue as a significant investor in both USC and Cruise, retaining a 20 per cent shareholding, and will remain as chairman of both companies.
He will also provide strategic guidance to the newly-established premium and luxury lifestyle division of Sports Direct International.
USC currently has 38 stores across the UK and turnover in the 12 months to 30 January 2011 was £70m. Cruise has ten stores in the UK and an annual turnover of about £20m.
Sir Tom Hunter said: "This deal will transform the prospects for both USC and Cruise and our employees at a time of extraordinary turbulence in the High Street. I've known the Sports Direct team for many years and have huge respect for their talent and look forward to co-investing with them. Sports Direct has a truly exceptional track record in building partnerships with its customers and its staff."
Chief executive of Sports Direct, Dave Forsey, said the two fashion retailers would remain independent of Sports Direct, adding his company would "support the businesses with our operational expertise".
New USC stores are due to open in Swindon and Newbury in the autumn of this year.
