Sports Direct International (SPD) – sale of Dunlop brand highlights hidden value
Sports Direct’s agreement to sell the rights to its Dunlop brand and related wholesale and licensing businesses compelled us to take a closer look at the total brand value of the Group’s other brands.With a large number of iconic brands in its portfolio, there appears to be plenty of hidden value.
The Dunlop Business has been sold to Sumitomo Rubber Industries Ltd. (SRI) for a cash consideration of US$137.5m. For the year ended 24 April 2016, The Dunlop Business had combined revenue of £42.64 million, gross assets of £41.76 million and profit before tax of £4.06m. That implies a hefty approx. 28x pre-tax multiple for this well-known, if somewhat under-rated, sports brand. The divestment of the Dunlop Business is in line with Sports Direct’s stated aspiration to become the “Selfridges” of sports retail, including its renewed focus on its core UK business and the development of its relationships with third party…