Sports Direct buys 50 US stores from bankrupt Eastern Outfitters

Sports Direct has unveiled plans to expand its operation across the Atlantic, after acquiring Eastern Outfitters for a cash deal worth $101m (£78.8m).

The US-based company, which owns discount chain Bob's Stores and outdoor retailer Eastern Mountain Sports, filed for bankruptcy in February this year, after posting a pre-tax net operating loss of $26m in the year to 28 January.

However, the deal, which was approved by the Delaware Bankruptcy Court and is expected to be completed in the first half of next month, will see Sports Direct save Eastern Outfitters from folding.

Mike Ashley's group, which bought Eastern Outfitters' debt before it went into administration to avoid it going into liquidation, will take control of the company's 50 US stores under Bob's Stores and Eastern Mountain Sports.

Sports Direct said the deal for the US group, which at the end of its latest financial year had $126m worth of assets under control, would provide it with a "footprint in US bricks-and-mortar retail and a platform from which to grow US online sales".

The deal comes a month after the FTSE 250-listed sports retailer warned the euro's devaluation against the dollar could have a negative impact on its gross margins, adding its euro-dollar exchange rate was currently hedged at $1.46 but that it had no hedge in place for next year.

The acquisition is the latest chapter of Ashley's recent shopping spree, which has seen the controversial tycoon add a 7.9% stake in athletic apparel store Finish Line to his portfolio and women's underwear brand Agent Provocateur.

Last month, the luxury lingerie company was sold via a pre-pack administration to Four Marketing, a London-based branding agency that is one-fourth owned by Sports Direct.

A pre-pack insolvency is a bankruptcy procedure in which a buyer is found in advance of a company declaring its insolvency.

However, the company's founder, Joe Corre, criticised the sale of the company to Sports Direct as "a disgrace to British business".

Corre accused 3i, the private equity group that oversaw the lingerie chain's collapse into insolvency and its subsequent sale to Ashley, of deliberately managing the business into administration in order to avoid debt obligations.