Sports Direct buys chunk of MySale

Mike Ashley's Sports Direct empire has muscled in on the turf of fellow tycoon Sir Philip Green by snapping up a stake in retailer MySale.

Mike Ashley has snapped up parts of rival businesses on a number of occasions in the past, such as JJB and JD Sports
Mike Ashley has snapped up parts of rival businesses on a number of occasions in the past, such as JJB and JD Sports

The group disclosed that it had bought a 4.8% chunk in the online business - which sells fashion and beauty products at discount prices - two days after it floated on London's junior AIM market.

Newcastle United owner Mr Ashley has snapped up parts of rival businesses on a number of occasions in the past, such as JJB and JD Sports.

He has also bought chunks of department store chains Debenhams and House of Fraser.

Announcing the acquisition of a stake in MySale, Sports Direct cited "the potential to co-operate on significant collaboration and joint venture opportunities in Australasia and Asia".

It said MySale was "ideally suited" to help it realise its multi-channel potential in the region.

But the online retailer already has a high profile retail backer, as Topshop mogul Sir Philip owns a 22.1% stake in the business, through his wife's offshore investment firm Shelton Capital.

MySale is a flash sale website, which means that it sells cut-price items to its 10.8 million members over a limited time scale.

The firm, which raised £40 million in the flotation, got off to shaky start on Monday after it was mistakenly priced in pounds rather than pence.

On trading screens this made its 226p launch price appear as 2.26, which triggered automatic selling of the stock causing it to fall as much as 26.5%.

The stock was correctly repriced the following day but at the close of trading today it was still well below the offer price, at 201p.

MySale is run by Rutland-born brothers Jamie and Carl Jackson who founded the firm seven years ago in Sydney.

The company, which employs 500 staff, has agreements with over 2,500 brands and retailers who sell surplus or out-of-season stock on its websites.

The move for MySale is the latest in a series of forays by Mr Ashley to buy up chunks of other retailers.

Earlier this year, he tried to muscle in at the last minute on the Chinese takeover of House of Fraser by snapping up an 11% stake in the department store.

In January, he took an option to buy a 6.6% slice of struggling Debenhams.

Meanwhile, there have been repeated clashes with Sports Direct shareholders over attempts to win approval for bonus schemes for its founder.

In April it was forced to scrap plans to award him more than £70 million after investors raised concerns that it was not in line with corporate best practice and did not include other company executives.

But earlier this month it announced fresh plans for a new bonus scheme worth around £200 million for 3,000 employees including Mr Ashley.