The high street tycoon Mike Ashley is continuing his unprecedented acquisition spree by tabling a bid to acquire Links of London, the struggling jewellery chain.
Sky News has learnt that Sports Direct International, in which Mr Ashley is the majority shareholder, is one of two final bidders attempting to buy Links from its stricken Greek owner.
Sports Direct’s presence in the auction has emerged just days before the company holds an annual meeting that is set to see a big protest vote from institutional investors against Mr Ashley’s leadership of the company.
The retailer has lurched from one crisis to another in recent months, failing with a series of bids to gain control of Debenhams, seeing its auditor resign and disclosing a £600m tax demand from authorities in Belgium.
Sources said on Monday that Mr Ashley was interested in acquiring Links as part of his attempt to transform House of Fraser – which he bought out of administration last year – into “the Harrods of the high street”.
Little more than 12 months after the most important takeover of his career, however, that strategy is in crisis after the businessman conceded that the department store chain’s problems “are nothing short of terminal in nature”.
In a delayed set of annual results released last month, Sports Direct said that with “the gift of hindsight we might have made a different decision in August 2018”.
Its offer for Links, which is racing to secure a new owner within days, is not unexpected given Mr Ashley’s examination of bids for numerous high street brands.
In the last 15 months, he has spearheaded takeovers of House of Fraser, Evans Cycles, Game Digital, Sofa.com and, most recently, Jack Wills.
The owner of Newcastle United FC has also had offers turned down for Patisserie Valerie’s parent company, HMV and Debenhams.
Sports Direct is a substantial shareholder in Goals Soccer Centres and is also attempting to buy the chain of listed five-a-side football venues.
Mr Ashley’s unabated shopping spree is significant in demonstrating his belief in the future of recognisable high street brands.
It also highlights the difficulties facing the tycoon as he seeks to persuade a new auditor to replace Grant Thornton after Wednesday’s AGM.
The “big four” auditors have all turned down the chance to take on Sports Direct’s audit, as Sky News revealed last year, citing client conflicts and reputational risk.
Even though some of the businesses it has snapped up are relatively small, Sports Direct’s decision to continue acquiring retail brands risks heightening the complexity that a new auditor will be confronted with.
Investors have been urged by proxy advisers to oppose Mr Ashley’s re-election as chief executive this week, although his controlling stake mean they have no chance of success.
Sports Direct shares have fallen nearly 30% in the last year, leaving the company with a market value of £1.35bn.
The AGM will be held above Sports Direct’s Flannels store on London’s Oxford Street, which opened last week in an effort to attract higher-spending fashion shoppers.
If Mr Ashley is successful with his bid for Links, it would inevitably entail further redundancies in a retail sector which has already seen tens of thousands of job losses in the last year.
Mr Ashley has repeatedly denied any intention to take Sports Direct private, going so far as to say recently that being listed gave him “discipline”.
He said: “Imagine if I was private, I’d be uncontrollable.”
Many of Sports Direct’s City shareholders would be dismayed at a low-ball attempt to take the company private given the 45% slump in its share price during the last 12 months.
Others, however, would be privately relieved that the corporate governance of a company which is now struggling to find an auditor willing to supervise its accounts was no longer their concern.
Sports Direct does not have the field to itself in the auction of Links.
Hilco Capital, the owner of Homebase, is also bidding and may have joined forces with Links’ current owner to acquire it through an insolvency process, according to retail industry sources.
Links is owned by the troubled Greek company Folli Follie, which was plunged into crisis over a fraud relating to overstated sales.
The future of the UK chain has been in doubt for several months.
Links trades from around 20 standalone stores and a large number of concessions, and is said to be losing upwards of £10m on sales of just £20m.
The jewellery chain’s auction is being run by Deloitte, the accountancy firm, and Savigny Partners, which focuses on transactions in the luxury goods sector.