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Mike Ashley Spending £45m But Don’t Get Too Excited

10 years ago

It was confirmed today, Mike Ashley spending of £45m to buy a near 5% share in Debenhams, via his Sports Direct empire.

Debenhams had terrible recent financial figures but Ashley can see yet again the potential of good business via his investment.

As well as cheap socks and other pile it high stock, Ashley’s empire also currently sells higher end stuff such as Gucci, Victoria Beckham and Lulu Guinness.

Even in its middle range fashion chains, Ashley’s shops (USC/Republic etc.) sell brands such as Levi, Diesel and Hilfiger which could see the addition of ‘Designers at Debenhams’ into those chains.

On the other hand the Ashley acquired brands such as Lonsdale, Firetrap and Dunlop (as advertised at St.James’ Park and in the match programme!) could now appear shortly at Debenhams.

It is real coincidence that the price paid for the Debenhams shares was £45m because we are currently in a period where that is the exact figure that Premier League clubs are allowed to over spend each season under the Financial Fair Play (FFP) rules. Even after that there are all kinds of allowances for over spending (losing money), allowing owners to put money in various ways into their clubs/investments.

Sadly Mike Ashley clearly doesn’t see Newcastle United in the same light as the rest of his business empire and sees no point in investing now for greater returns in the future.

Is it because he thinks that Newcastle United will deliver profits regardless and so he doesn’t think he has to invest, or is it that investing for potential success, on and off the pitch, at a football club isn’t such a sure thing as buying up struggling retailers in these times of economic strife?

Either way, Newcastle fans are all losers while he is in charge, with all the free benefits from Newcastle United flowing into the rest of Mike Ashley’s empire.

On Sunday during the Manchester City match it was Karrimor, the rucksacks and outdoor sports enthusiasts retail chain, getting the massive push to a worldwide audience via substantial free advertising at St.James’ Park, the company bought up by Ashley in 2004.

Coming soon to St.James’ Park – Debenhams!


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