Sports Direct International PLC (LON:SPD) has agreed to sell the Dunlop brand to Japan’s Sumitomo Rubber Industries for £112mln so it can concentrate on becoming the “Selfridges of sports retail”.
The business, which turned over almost £43mln last year, was acquired 12 years ago for £40mln.
The sale is part of founder Mike Ashley’s back to basics strategy of focusing on core brands.
Sports Direct cited a lack of management “bandwidth” to maintain and grow the label, although it will hold a royalty-free licence to continue to produce Dunlop workwear.
Sumitomo, a conglomerate with interest spanning construction, media and food, already owns the rights to Dunlop in Japan, Korea and Taiwan and shares the US rights with Sports Direct.
It has also has a 60% stake in the Dunlop Sports Co, which is listed on the Tokyo stock market.
This is the second big deal in this month for the Japanese, which also swooped to acquire the banana producer Fyffes for £663mln.
The sale is expected to complete in late spring.
Sports Direct, in a brief stock exchange statement, told investors: “The divestment of the Dunlop business and the transaction is in line with Sports Direct's stated aspiration to become the Selfridges of sports retail, including its renewed focus on its core UK business and the development of its relationships with third party brands.
“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.”