The Sports Direct tycoon Mike Ashley has agreed a cut-price takeover of Sofa.com, the online furniture retailer, after seeing off interest from rival bidder ScS Group.
Sky News understands that Mr Ashley struck a deal late on Thursday to buy Sofa.com for “a nominal sum”.
The takeover will enable the billionaire businessman to add further Sofa.com concessions to the House of Fraser (HoF) chain he bought from administrators last year.
Mr Ashley’s purchase of Sofa.com underlines his apparently insatiable appetite to expand his empire even at a time of dire trading conditions for the UK’s retail sector.
In a stock exchange announcement on Friday morning, ScS, the furniture and floorings chain, said it was no longer in the running to buy Sofa.com.
Insiders confirmed that Mr Ashley had signed a deal to buy the site and said it had been a solvent transaction which preserved jobs at Sofa.com.
The tycoon intends to honour all outstanding customer orders as part of the deal.
The sources added that ScS’s bid had been predicated upon a pre-pack administration, which would have left some of Sofa.com’s liabilities behind.
Sky News revealed details of the auction, which was run by KPMG, earlier in the week.
Sofa.com is thought to have been impacted by HoF’s administration, and the subsequent closure of a number of its outlets amid plans to roll out Sofa.com concessions across the department store chain.
The business has been bought from LGT European Capital, which took control of the online retailer last year after having been a lender to the business.
LGT became the majority shareholder in Sofa.com last April, with the business previously having been owned by CBPE, a private equity firm.
In its accounts for the year to 28 February last year, Sofa.com Topco said its “trading performance in the year [had] been impacted by uncertain market conditions”.
The company reported flat turnover of £28.8m and an operating loss of £33.6m, more than double the previous year’s loss.
The sale process was launched despite people close to the company insisting that it recently enjoyed its best-ever trading week, with sales up 30%.
Sofa.com is chaired by Justin Stead, the former boss of the jewellery retailer now called Watches of Switzerland Group.
The battle between Sports Direct and ScS comes during a protracted period of turmoil for the retail sector, with both online and high street businesses affected.
Mr Ashley has seized upon those difficulties to buy stakes in or snap up outright struggling competitors.
As well as a stake in Debenhams that may position him to engineer a merger between it and HoF, the tycoon – who owns Newcastle United FC – is also bidding for HMV, the music and entertainment chain.
Last week, Sky News revealed that Mr Ashley was seeking a six-month rent-free period from HMV landlords in order to pursue his interest in the business.
Neither Sports Direct nor Sofa.com could be reached for comment.
(c) Sky News 2019: Ashley rests easily with purchase of Sofa.com