Controversial retailer Sports Direct saw shares rise on Wednesday, after selling its Dunlop brand to Japanese company Sumitomo.
Sports Direct announced the deal in a statement, confirming that it has “entered into an agreement to sell its rights to the Dunlop brand and related wholesale and licensing businesses to Sumitomo Rubber Industries for a cash consideration of $137.5 million”.
Sports Direct have owned Dunlop for over 10 years, after it was bought by founder Mike Ashley acquired the brand for an estimated £40 million in 2004 from Royal Bank of Scotland.
Dunlop currently operates across the world, including big markets in the UK, Europe, parts of Asia, USA and Canada. Tennis champions Rod Laver, John McEnroe and Steffi Graf are fans of the brand, as well as golfers such as the 2011 British Open winner Darren Clarke and the former world number one Lee Westwood.
For the year ended 24 April 2016 Dunlop had a combined revenue of £42.64 million, alongside gross assets of £41.76 million. In a statement, Sports Direct said it did “not currently have the bandwidth to develop and manage international brands simultaneously.”
It adde that that the deal was “conditional upon merger clearance in Germany and the Philippines [but] subject to merger clearance being received in those jurisdictions, the Transaction is expected to complete before 31 May 2017.”
Sports Direct has been at the centre of several scandals of late, after it was exposed by the Guardian that it did not pay employees the minimum wage.
Sports Direct (LON:SPD) shares are currently up 3.18 percent at 281.06 (1450GMT).