Sports Direct Founder Mike Ashley has paid £10 million for a 25.75% stake in struggling games retailer Game Digital.
Ashley, via Sports Direct and other investment vehicles, also has stakes in high street chains Debenhams and French Connection as well as home shopping company Findel.
Game Digital issued a profit warning last month blaming a shortage in supplies of Nintendo’s new Switch gaming console. It said in a statement to the London Stock Exchange that it was aware Sports Direct had taken “significant strategic equity stakes in a number of retail and brand businesses across both the UK and US”, and said it was “pleased that the strategic value of the group has been recognised by Sports Direct”.
It added: “The group looks forward to working collaboratively with Sports Direct to explore the clear opportunities that a constructive partnership and collaboration can deliver for all stakeholders in the gaming, live events and rapidly growing eSports markets in which it operates.”
Ashley, who owns Newcastle United FC, is a controversial figure, after being criticised for paying staff less than the minimum wage and last week appearing in court over allegations he failed to honour a £15 million payment to a former colleague.
He is thought to see opportunities in Game’s presence in the fast-growing e-sports market and the size of the shareholding has driven speculation that Ashley is planning a bid for Game.
The retailer, which has 580 shops in the UK and Spain, has a market value of £33.74 million, following a near 60% slump in the shares over the past six months amid continued trading difficulties. It has tried to diversify into events, e-sports and other digital sectors as consumers shift away from physical stores into a more direct relationship with games publishers.