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Monday, October 18, 2021

Sports Direct eyes higher sales as investors vote on Frasers rebrand

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Sports Direct shareholders are set to vote on whether the group rebrands as Frasers Group, as it also reports how sales performed during a tough six months for retailers.

The spotlight will be on Mike Ashley’s retail group as it reports its half-year sales for the period to October on Monday.

The group has seen its shares perform ahead of its retail rivals over the past 12 months, rising 42%, despite a typically busy year for the company.

Sports Direct shares have continued to rise following a slump in July, after the firm warned of “terminal” problems in its House of Fraser chain, as it also revealed the business had been hit with a £600m (€719m) tax bill from the Belgian authorities.

Investors also appeared to welcome Mr Ashley’s suggestion in October that his recent acquisition drive has been placed on hold.

Brokers expect the company to post higher sales as it also hopes to stem a fall in profits, as cost pressures continue to weigh on high street retailers.

In July, Sports Direct reported that sales across the company grew 10.2% to £3.7bn (€4.4bn) in the year to April.

However, its key retail business, which trades under the Sports Direct brand, saw sales rise by just 0.3% to £2.19bn (€2.6bn), although on a like-for-like basis, which excludes new stores, it fell 1.6%.

On Monday, investors in the company will also attend a general meeting in London to vote on proposals to rebrand the listed company as Frasers Group.

Sports Direct said the rebrand has been proposed to “reflect the changing profile and consumer proposition of the group” amid a continued effort to improve the company’s image.

The move follows a recent announcement that the retailer will launch a new lifestyle store chain called Frasers on the high street within the new financial year.

It said the move is “reflective of the business strategy of the company to elevate its retail proposition across all channels and demonstrates the transformation of the company over recent years into the holder of a diversified portfolio of sports, fitness, fashion and lifestyle fascias”.

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