Mike Ashley’s Sports Direct has agreed a £112.3 million sale of Dunlop to Sumitomo Rubber Industries (SRI). The firm said the decision had been made to sell off the tennis equipment brand to the Japanese company because it did not have the “bandwidth” needed to develop and manage Dunlop.
The historic brand has been owned by Sports Direct for 12 years. When Mr Ashley bought the firm for £40 million it was in difficulties. The firm was established back in 1889 when it specialised in making rubber products. It is best known for making tennis balls, having diversified in 1924.
It then began to make sports shoes, clothing and tennis rackets, and its equipment has been used by champions including tennis legends John McEnroe and Steffi Graf.
In a statement, Sports Direct said it had decided it needed to prioritise its core UK business and that it did not have the capacity to manage Dunlop. According to Sports Direct, Dunlop has a combined revenue of £42.64 million, gross assets of £41.76 million and profit before tax of £4.06 million.
The buyout means that SRI will be able to make and sell Dunlop products across the globe. However Sports Direct will still be able to keep using the Dunlop brand for work and safetywear.
The deal also still needs merger clearance in both Germany and the Philippines. Provided that the green light is given, the merger is expected to happen before the end of May next year.
Sports Direct has recently come under fire for conditions at its workhouses which have been described as like a “Victorian workhouse”. A report from an all party House of Commons Select Committee said that staff were treated as commodities rather than as human beings. However, a Sports Direct spokesperson said that the firm had a policy of treating everyone with dignity and respect.