Sports Direct snaps up 5pc of shares in retailer Debenhams

Sports Direct International said the stock market purchase, worth around £46m, would allow the companies to consider ways to work together.

Debenhams, which issued a profits warning on New Year’s Eve after poor Christmas trading, said it was open-minded about the offer of exploring operational opportunities in order to improve its performance.

As well as 409 stores in the UK, Sports Direct has a portfolio of 28 internationally recognised sports, fashion and lifestyle brands including Dunlop, Slazenger, Everlast, Lonsdale and Karrimor.

The group bought Leeds-based Republic from administrators last February.

Mr Ashley set up the business on leaving school in 1982 and was the sole owner until a stock market listing in March 2007 which netted him £929m. He is executive deputy chairman but receives no payment.

The company, which has purchased 56.8m shares in Debenhams, has a history of buying strategic stakes in other retailers, most recently JJB Sports. It is the current owner of a near 12 per cent holding in rival JD Sports Fashion.

It said: “This acquisition of shares has taken place without the prior knowledge of the Debenhams board of directors, but Sports Direct has communicated to Debenhams’ board its desire to work together and its intention to be a supportive shareholder.”

The company said: “Debenhams notes that Sports Direct intends to be a supportive shareholder and that it wishes to explore options at an operational level to work together.”

Debenhams is “open-minded”, added the statement.