Sports Direct sells Dunlop brand to Japanese buyer for £112m as it refocuses on becoming “Selfridges of sports”
Sports Direct is selling the Dunlop brand for $137.5m (£112.3m) to Japan's Sumitomo Rubber Industries (SRI) as part of its bid to become "the Selfridges of sports retail".
The high street chain is re-focusing on developing its relationship with third party brands and its core UK business and has agreed to sell Dunlop's sporting goods and licensing businesses to the Japanese buyer, who have in turn granted Sports Direct a royalty-free licence to continue using the brand.
Purchased by Sports Direct founder and chief executive Mike Ashley for an estimated £40m in 2004, after Royal Bank of Scotland had taken control of the then-struggling business, Dunlop made a pre-tax profit of £4m on revenue of £42.6m for the year ended April 2016.
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In a statement Sports Direct said: "Sports Direct's senior management team currently needs to prioritise the core UK businesses and relationships with third party brands and does 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."
The sportswear retailer has endured a tough 2016 in which its share price has tumbled nearly 50 per cent and its executives have been savaged by critical MPs for worker's conditions.
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Earlier this month the company revealed pre-tax profit had fallen by 57 per cent to £71.6m in first half of the year.
SRI is a subsidiary of the vast Sumitomo Corporation, a Tokyo stock exchange-listed conglomerate that owns 800 different companies, employing more than 65,000 people.
The Dunlop purchase marks Sumitomo's second acquisition of a UK company this month after they purchased Dublin-based banana producer Fyffes for £633m.