Mike Ashley has made an approach for collapsed fashion chain LK Bennett, the retail tycoon’s latest effort to take advantage of carnage on the British high street.
The billionaire owner of Sports Direct and Newcastle United made his indicative offer for the upmarket retailer this week, according to people familiar with the matter.
Directors at LK Bennett, which counts the Duchess of Cambridge among its well-heeled customers, made presentations to potential buyers this week after going into administration earlier this month.
The move for the clothing brand comes after Mr Ashley’s business snapped up department store group House of Fraser and as he battles for control of Debenhams.
Linda Bennett, who founded LK Bennett in 1990 and retook control of the business in 2017 after it reported a crushing £48m annual loss, has not submitted a bid for the company at this stage, said one person with knowledge of the situation.
Now the chain has fallen into administration Ms Bennett, who lent the company £11.2m of her own funds in an attempt to keep it afloat, is a significant creditor and will be able to influence who buys it.
Administrator EY and Ms Bennett declined to comment. Sports Direct declined to comment.
Sports Direct, in which Mr Ashley holds a 61.5 per cent stake, has been on a high-street bargain hunt for months, snapping up beleaguered retailers whose pricing, staff costs and rental costs have not been able to withstand a consumer spending downturn.
Mr Ashley’s chain in October bought bicycle specialist Evans Cycles out of administration for an undisclosed price, in a so-called pre-pack deal arranged in advance with administrators PwC. This came two months after Sports Direct, which has a stock market valuation of £1.6bn, spent £90m buying House of Fraser out of administration.
However, the company is not always successful in its approaches. Last month Mr Ashley’s group made a bid for Patisserie Valerie, the British café chain that suffered an alleged accounting fraud, but walked away two days later complaining of being locked out of the bidding process.
Sports Direct also lost out on music retailer HMV, which was bought out of administration instead by Canadian entrepreneur Doug Putman’s Sunrise Records. Debenhams, meanwhile, is battling Mr Ashley’s attempt to dismiss all but one of its six directors and install himself as chief executive.
LK Bennett collapsed into administration following successive attempts by Ms Bennett to restructure the company, which was ultimately unable to sell enough of its products to pay the rents on its 200 stores and concessions.
In 2018 Ms Bennett sold a 70 per cent stake in the company for about £70m to private equity firm Phoenix Partners and former Jimmy Choo chief executive Robert Bensoussan. She retook control of her empire in 2017 by buying out Phoenix for just £3m.