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SBD Global/December 16, 2013/Finance

U.K. Retailer Sports Direct Founder Threatens To Build Hostile Adidas Stake

U.K. retailer Sports Direct's billionaire founder Mike Ashley is "threatening to build a hostile stake in Adidas as a row escalates over the supply of Premier League football kits," according to Oliver Shah of the SUNDAY TIMES. Ashley has indicated that Sports Direct could "start buying shares to exert pressure on the German sportswear manufacturer after it refused his shops access to next season's replica Chelsea strip." The "row between Ashley and Adidas" started after the German company "reviewed the distribution of its products 'based on criteria such as in-store environment and customer service levels.'" Adidas said that Sports Direct continued to be "an important retailer" but that it was "implementing a new distribution strategy across Europe for key products in football and other sports." As of next season, Chelsea's strip will be available "only through the football club" or adidas stores. The kit is one of the "best-selling items in Sports Direct’s 400 stores." Sales of the club's products are worth between £8M-£10M ($13M-$16.3M) a year to the company. As well as the Chelsea strip, Ashley raised the issue of "certain Adidas footwear brands with analysts" Thursday. Adidas supplies Sports Direct with "black Nitrocharge 3.0 boots but denies it access to the more popular blue version worn by top footballers." Insiders indicated that Ashley said that if he "saw the blue shoes on sale in rival JD Sports," he would sell his stake in JD and "buy a stake in Adidas" (SUNDAY TIMES, 12/15).
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