The overlap between the clientele of Sports Direct and French Connection is probably very small, but that has not stopped the former from taking a major stake in the latter.
Sports Direct International PLC (LON:SPD), controlled by portly Mike Ashley, has taken an 11% stake in French Connection Group PLC (LON:FCCN), which may explain why the fashion flogger’s shares shot up 12.3% yesterday.
As is Ashley’s wont, Sports Direct has built its stake through contracts for difference, securing the voting rights over 10.74mln shares.
Previously, Sports Direct has built stakes in fellow retailers such as Tesco and Debenhams, and attempted to use those as a means of exerting influence.
Company founder Stephen Marks holds a 42% stake in the company, so he’s unlikely to be fazed by the prospect of Ashley throwing his weight around anymore than has been by the City’s dislike of him occupying both the chairman and chief executive roles, in contravention of accepted best practice.
"We note that Sports Direct has taken long-term significant stakes in a number of British retailers in recent years, and see this investment as a vote of confidence in the true potential of our company. We look forward to working with them more in the future," the company said in a press statement.