Mike Ashley adds Sofa.com to his high street empire | Business

The Sports Direct founder, Mike Ashley, has added the online retailer Sofa.com to his rapidly expanding high street empire, which now encompasses sportswear, department stores and furniture.

Ashley saw off competition from the stock market-listed furniture specialist ScS Group to win control of Sofa.com. He is trying to turn around the loss-making House of Fraser chain; the Sofa.com brand is already sold in eight stores.

Ashley has been on a buying spree over the past year, snapping up struggling retail chains including House of Fraser and the bike specialist Evans Cycles. He is also in the running to acquire the collapsed entertainment chain HMV. Sports Direct also has shareholdings in multiple high street chains including French Connection, Game Digital and Debenhams.

The company’s sprawling interests mean Sports Direct’s tills now ring up 3p in every £1 spend on non-food products in the UK, according to retail analysts at GlobalData.

Sofa.com was started by the entrepreneurs Rohan Blacker and Pat Reeves (who died in 2014) in 2006. The pair bought the domain name sofa.com for $215,000 and set about cashing in on the emerging online furniture market, making on-trend sofas and beds to order at the company-owned factory in Poznań, Poland.

In 2015 the private equity firm CBPE acquired a controlling stake in Sofa.com for £40m-£50m. However that deal turned out to be the high-water mark for the business: a decision to expand its high street operation to nine showrooms backfired, and the company suffered heavy losses.

The most recent accounts filed at Companies House show Sofa.com made a loss of nearly £10m on sales of £27.6m in the year to 28 February 2018. Last year CBPE was wiped out in a restructuring process that saw its lender, the private debt fund LGT European Capital, take control of the business.

Ashley paid a nominal sum for the website, according to Sky News, which first reported the story. The deal means he is also taking responsibility for Sofa.com’s high street stores. All outstanding customer orders are expected to be honoured as part of the deal.

In a stock exchange announcement ScS Group confirmed it was no longer in discussions regarding a potential acquisition of Sofa.com. It is understood that any rescue by ScS would have been via a pre-pack administration that would

Source link