sports direct

Sports Direct has reported a 27% decline in profits, as its acquisition of House of Fraser impacted earnings.

The sports goods retailer said underlying profit fell to £64.4 million in the six months to October end.

Net debt rose to £505.5 million, up from £471.7 million in the same period.

This was largely attributed to the group’s rescue of failing high street department store House of Fraser earlier this year.

Sports Direct have already announced the closure of underperforming Sports Direct sites in Essex, Gateshead, Norwich and Nottingham.

Chief Executive Mike Ashley commented: “I have made my views clear that I believe the previous House of Fraser senior management team traded the business whilst it was insolvent for a long time.

“This means we have significant challenges ahead in turning House of Fraser around.

Nevertheless, Ashley reiterated his pledge to transform the struggling House of Fraser brand into ‘the Harrods of the high street’.

He added:

“However, I genuinely believe we have acquired a fantastic opportunity and with the efforts of Sports Direct and House of Fraser teams, and the support of the brands, local councils and landlords, we can turn House of Fraser into the Harrods of the high street.”

Echoing Ashley’s sentiments, Sports Direct non-executive chairman David Daly said:

“The fact that Sports Direct is responsible for saving thousands of jobs at House of Fraser, at a time when the High Street is under immense pressure, is an achievement of which everybody in the Group should be extremely proud.”

Shares in Sports Direct (LON:SPD) are down -5.86% as of 10:39AM (GMT).