Mike Ashley, a multi-millionaire who has been wreaking havoc in the British sporting goods business over the last years, has taken over the Original Shoe Company, a young fashion shoe chain. The takeover should allow the chain to roll out stores more speedily. While Ashley is best known for the discounting policies of its Sports World and Sports Soccer chains, Original Shoe is expected to continue to operate as a full-price retailer.
Ashley is known in the sports business as an acquisitive entrepreneur who has upset the British market with his discount formulas. Over the last months he has taken over two other sports retailers, Gilesports and Hargreaves, while mulling the launch of an action sports banner.
Ashley is deeply involved in the shoe business through his sporting goods operations, which have yielded very close contacts with large footwear sourcing and trading organizations. However, the acquisition of Original Shoe marks an unprecedented foray into general footwear and fashion retailing, which is likely to unsettle many British specialists.
Original Shoe was previously controlled by David Hammond, managing director, with other family members and institutional investors holding smaller stakes. Over the last months the company had been holding talks with its bankers to obtain financing for a faster roll-out of its stores. The expanded banking deal was meant to be worth £10 million (€14m-$18m), with £3 million earmarked for store openings. However, these talks were apparently dragging on and Ashley’s takeover, at an undisclosed price, makes them obsolete.
Original Shoe currently boasts 52 stores but the company’s managers believe that there is a potential for up to 250 Original Shoe stores in the country, to open at a pace of about 20 per year. As a result of the changes which Original Shoe has implemented over the last 18 months, from the second half of this year the mix of products should consist at 30 percent of apparel and at 70 percent of footwear. The footwear ranges include brands like Henri Lloyd and Henleys, and they are accompanied by a small offering of private labels, sold under the Ricci brand for men and the OS2 brand for women.
According to some observers, Ashley’s move may be just a prelude to a deeper involvement in the fashion and apparel business. It has been persistently rumored that he might be interested in acquiring a controlling stake in Matalan, a British apparel discounter with which he is linked as a supplier.