As UK retailer GAME struggles, Sports Direct snaps up 26% stake

  • As UK retailer GAME struggles, Sports Direct snaps up 26% stake

As UK retailer GAME struggles, Sports Direct snaps up 26% stake

Sports Direct, helmed by tycoon Mike Ashley, has bought 44m shares in GAME, giving the buyers a 25.75% stake in the retailer.

U.K retailer GAME Digital have announced this morning that 26% of their stock has been sold to sportswear retailer Sports Direct.

Game said in a statement to the London stock exchange that it was aware Sports Direct had taken "significant strategic equity stakes in a number of retail and brand businesses across both the United Kingdom and US", and said it was "pleased that the strategic value of the group has been recognised by Sports Direct".

Mr Ashley, who has recently been embroiled in a lurid court case with an investment banker, has a history of snapping up stakes in struggling high street firms. Business as usual for Sports Direct, and perhaps the implementation of a decidedly questionable working environment in GAME's online and high-street stores throughout the country. Furthermore, the company indicates it is "pleased that the strategic value of the group has been recognised by Sports Direct through this acquisition of a 25.75% stake". Shares in the company collapsed by 36% last month after a profit warning.

Ashley is now being sued by former advisor Jeff Blue over an alleged £15 million bonus.

You might have thought there was more direct routes into eSports than via GAME, but investing in retailers is what controversial owner Mike Ashley is used to - following similar investments in Debenhams and French Connection.

"The strategic play is not likely to have any concern with reference to the console cycle but rather growth in e-sports, Insomnia events and in-store gaming". Ashley disputes the agreement and Sports Direct share price has since crashed over controversy around how much it pays some staff.

Game's shares closed almost 23% higher on Wednesday at 24.25p amid speculation about higher-than-average trading activity.