Ashley strikes deal with Game Digital

Mike Ashley
Mike Ashley
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Tracksuit tycoon Mike Ashley is to delve deeper into the world of video game retailing after striking a deal with Game Digital to introduce e-sports concessions into Sports Direct stores.

The billionaire retailer, who holds a 26% stake in Game, has now picked up 50% of the high street chain’s Belong e-sports division for £3.2 million.

So-called e-sports involve professional gamers battling it out in front of crowds at events such as Insomnia.

Game boss Martyn Gibbs said: “As more consumer focus and spend moves to experiences, we are well advanced in delivering unique, world class gaming at both local and national level.

“Having launched the Belong brand just over a year ago, we have now opened 19 arenas and are very encouraged by the popularity and performance of these locations.”

Alongside the Belong stake, Sports Direct will also provide Game’s Spanish arm with £55 million of borrowing, which is available to use to fund the roll out of more arenas.

Shares in Game were up 12% in morning trading to 42.2p.

Adam Tomlinson, analyst at Liberum, said: “The potential to locate both Belong and Game retail stores in Sports Direct stores also improves Game’s ability to optimise its UK store base, where 221 lease events are due to occur in 2018.

“More details are needed to fully assess the value of the opportunity ahead, but we see today’s announcement as a clear positive overall.”

Game has had a difficult time of late and slumped to a £10 million annual loss in November, despite the success of gaming gadget the Nintendo Switch.

It saw UK retail underlying earnings slump 89.8% to £1.8 million after retail sales by gross transaction value tumbled 13.4% over the year.

The push into e-sports and live gaming aims to reduce Game’s reliance on the volatile console market.

Sports Direct has a number of stakes in rivals such as Debenhams and French Connection.

Jon Kempster, Sports Direct’s finance chief, said: “We are very happy to partner with Game in building an increased presence in the e-sports market through the Belong brand.

“This is a very good example of building a commercial relationship via our strategic investment approach.”