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High street tycoons Ashley and Cowgill lock horns again over Office | Business News

By May 8, 2020 No Comments
Mike Ashley (L) and Peter Cowgill have clashed over Office

The retail tycoons Mike Ashley and Peter Cowgill are locking horns in a race to buy Office, the shoe retailer, just days after they clashed over a controversial order for JD Sports Fashion to sell Footasylum.

Daily Week News has learnt that Mr Ashley and JD Sports are among the bidders for Office, the South African-owned chain which is seeking new funding to help it emerge from the coronavirus pandemic.

Sources said on Friday that at least two other parties had also expressed interest in buying the footwear retailer.

Truworths International, Office’s owner since 2015, is also considering whether to retake control of parts of the company, possibly through a pre-pack administration, the insiders added.

It is the contest between Sports Direct founder Mr Ashley and Mr Cowgill that will be of greatest industry, however, given the bitter rivalry which has erupted between Britain’s two biggest sportswear retailers.

On Thursday, the Competition and Markets Authority told JD Sports that it must offload Footasylum, which it bought last year, on the basis that it risked leaving shoppers disadvantaged.

Mr Cowgill branded the decision “extraordinary”, and said it relied on “an inaccurate and outdated analysis of the UK sports retail competitive landscape”.

The executive chairman of JD Sports, who has presided its growth into a company now valued by the London stock market at £5.4bn, said he would consider whether to appeal against the CMA’s verdict.

The mutual enmity between the two sportswear bosses was heightened by Mr Cowgill’s assertion that “the CMA has been taken in by the self-serving testimony of one notoriously vocal competitor”.

He added that Frasers had “made numerous public announcements confirming their ongoing investment in their elevation strategy and who has blatantly participated in the process for their own commercial interests rather than for the benefit of consumers”.

Office’s presence in the broader casual footwear market means that JD Sports’ interest in the chain is unlikely to trigger any competition concerns of the kind that scuppered the Footasylum deal.

One person close to JD, which declined to comment, suggested that other bidders were likely to be pursuing Office more aggressively than it would.

It was unclear on Friday whether Mr Ashley’s interest in Office was being expressed through Frasers Group or one of his private investment vehicles.

Shareholders in Frasers have previously sounded the alarm about the scale of Mr Ashley’s acquisition spree, after he orchestrated takeovers – usually through insolvency processes – of brands such as Evans Cycles, Game Digital, House of Fraser, Jack Wills and Sofa.com.

Shares in Frasers have fallen by about 13% during the past year, reflecting investors’ concerns about its ability to move upmarket and make a success of the House of Fraser department store chain it bought two years ago.

It now has a market value of just £1.3bn.

The sale of Office, which is being handled by professional services firm Alvarez & Marsal (A&M), is likely to conclude this month.

A&M declined to comment, while Frasers could not be reached.

Office trades from 130 stores in the UK and Europe, and last changed hands in a £250m deal five years ago.

Truworths considered restructuring Office through a company voluntary arrangement (CVA) last year but ultimately decided against using the mechanism to close unprofitable stores.

Instead, it concluded a refinancing in September, and said it would shut unwanted shops when their leases expired.

Truworths bought the Office chain in 2015 in a deal worth about £250m.

In addition to its UK estate, it trades from stores in Germany and Ireland.

The prospects of a solvent sale are unclear.

Since the outbreak of COVID-19, Cath Kidston, Debenhams and the Oasis and Warehouse Group have all called in administrators, citing the calamitous collapse in revenues with their stores closed and the lack of visibility about a recovery in consumer confidence.

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