Sports Direct warns of currency turbulence

File photo of Sports Direct founder Mike Ashley outside the Sports Direct headquarters in Shirebrook, Derbyshire, as the retailer faced more currency woes after the firm warned it will take a hit from the devaluation of the euro against the US dollar. PRESS ASSOCIATION Photo. Issue date: Tuesday March 7, 2017. Sports Direct said its euro/dollar hedging position is due to expire at the end of April and the firm has no hedge in place for the following financial year. Photo: Joe Giddens/PA Wire

The retailer said its euro/dollar hedging position is due to expire at the end of April and the firm has no hedge in place for the following financial year.

Sports Direct said: “In response to certain inquiries received by the company in relation to currency, we continue to believe the devaluation of the euro against the dollar will impact on gross margin.

“Our euro/dollar exchange rate is currently hedged at 1.46, which is due to expire at the end of full year 2017 and we currently have no euro/dollar hedging in place for full year 2018.”

A fall in the euro against the dollar is expected to see an increase in import costs. Sports Direct also sought to clarify its position regarding the acquisition of lingerie firm Agent Provocateur out of administration last week.

It said: “A number of recent press reports have incorrectly stated that Sports Direct has acquired Agent Provocateur. In fact, Agent Provocateur has been acquired by Four (Holdings) Limited, a company in which Sports Direct has a shareholding of 25%. Some reports have also stated that Sports Direct paid £35 million two years ago for a stake in Four Marketing. In fact, the amount paid for the shareholding in Four (Holdings) Limited was £8.75 million.”