Sports Direct owner buys into lingerie brand Agent Provocateur
Sports Direct owner Mike Ashley has acquired an interest in the struggling luxury lingerie retailer, Agent Provocateur, owned by a private equity group 3i since 2007.
The lingerie retailer, which has 10 stores in the United Kingdom and employs about 600 people, was acquired on March 2 by London-based branding agency Four Marketing, which is one-quarter owned by Sports Direct.
Both companies have not issued a statement yet on whether there will be job losses.
According to reports, Ashley paid around £25 million after seeing off competition from Lion Capital, a private equity firm.
Consultants Alix Partners sold Agent Provocateur through a "pre-pack" agreement to Four Holdings, which Ashley part-owns. The deal goes that Four Holdings can agree to the sale of the assets before buying the business and putting it into administration. It means the administration can sell the assets right away, without consulting the unsecured creditors.
Joe Corré, Vivienne Westwood's son and former manager of Sex Pistols Malcolm McLaren, stated the pre-pack agreement between 3i and Sports Direct is a disgrace to British business.
Corré and wife Serena Rees founded Agent Provocateur in 1994.
According to Corré, if the deal is pushed through, 3i and their partners are going to face a "phenomenal swath of litigation actions."
"3i's reputation is going to be left in tatters. I don't think they will ever recover from this. This is a phenomenal stitch-up."
A spokesperson for 3i, which bought Agent Provocateur in 2007, said last year it identified "material misstatements" in the company's accounts over a number of years that the company's Board, auditors and 3i as owners, had failed to notice.
Ashley's move is the latest of his efforts to divert from Sport's Direct's pile-it-high, sell-it-cheap model. Just earlier this month, Ashley bought an 11 percent stake in fashion chain French Connection.