Struggling upmarket underwear brand Agent Provocateur is the latest high-end retailer to be acquired by Sports Direct.

It was reported last week that investment vehicle Four Holdings, in which Sports Direct has a 25% stake, acquired Agent Provocateur’s UK business and global branding rights for around £30m from private equity fund 3i, after a bidding war with Lion Capital.

The acquisition was structured as a pre-pack administration, which allows administrators to effect a sale of all or part of a company’s business or assets prior to declaring insolvency. Mike Ashley, the retail tycoon behind Sports Direct, is understood to have played a key role in acquisition negotiations. He was able to cherry-pick parts of Agent Provocateur and ended up bagging the retailer’s UK business, which employs 600 staff and has 10 UK stores. However, 100 international stores are not being taken on.

Although the deal has drawn criticism (particularly from John Corré, co-founder of Agent Provocateur and son of Dame Vivienne Westwood), this is the latest of a string of acquisitions that indicate a shift in Ashley’s business strategy to move his retail empire upmarket. The entrepreneur’s increasingly diverse foothold in the retail market also includes luxury fashion retailers Flannels and French Connection (see our post here), Debenhams, JD Sports and House of Fraser.

What’s in store for Agent Provocateur’s business remains to be seen. The move to buy the lingerie brand through Four Holdings, parent company of Four Marketing – a fashion agency which runs websites for luxury brands and owns their flagship stores – could be indicative of intentions to maintain its high-end status.

Ashley has previously stated his intentions to turn Sports Direct into the “Selfridges of Sport”. Agent Provocateur, which has a very distinct brand, seems an unlikely candidate to fall under such plans. However, maybe this unexpected acquisition should teach us not to second-guess the unconventional tycoon. Certainly Ashley’s recent acquisitions indicate a more circumspect approach and a move away from the Sports Direct ‘sell it cheap stack it high’ business model.

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