Frasers Group saves 922 jobs as it snaps up DW Sports assets in £37m deal amid increasing scrutiny over refusal to return furlough millions
- Around 1,700 jobs were at risk when DW Sports fell into administration in July
- Reports now claim the deal with Frasers Group will save 922 jobs
- During the year ending 31 March 2019, DW made a loss of just over £20m
- DW Sports fell into administration at the start of the month on 3 August
A reported 922 jobs are set to be saved after Mike Ashley’s Frasers Group snapped up parts of DW Sports for £37million.
Frasers Group, which owns Sports Direct and House of Fraser, bought DW’s gym and fitness business and some of its stock, but the deal does not include the brand name DW, or the firm’s intellectual property.
However, that still leaves some in danger of losing their roles as around 1,700 jobs were put at risk when DW Sports fell into administration at the start of the month.
Fighting fit? Will DW Sports’ fortunes see a lift following its £37m deal where it sold some assets to Mike Ashley’s Frasers Group?
Frasers Group said: ‘The transaction compliments (sic) the existing gym and fitness club portfolio within the company’s group and is consistent with the group’s elevation strategy,’ it said in a statement.
‘Frasers Group looks forward to elevating the gym and fitness assets acquired pursuant to the transaction under the group’s existing iconic Everlast brand, and is also pleased to have saved a number of jobs.’
The price could rise to £43.9million if Frasers Group also acquires some leaseholds.
Before the coronavirus pandemic struck, DW Group was already struggling financially. During the year ending 31 March 2019, DW had gross assets of almost £195million, and made a loss of just over £20million.
Earlier this month on 3 August, DW appointed insolvency specialists, after its income was hit by the lockdown, which forced its stores and gyms to close.
The company operated 73 gyms and 75 retail sites in the UK, but had already revealed plans to shut 25 stores in July.
The £37million deal with Frasers Group comes after DW said it would wind down the retail business for good, with the remaining 50 stores to close.
Laughing all the way to the bank: Mike Ashley has been urged by MPs and campaigners to hand back tens of millions of pounds of furlough cash to taxpayers
The deal with DW Sport comes after city sources revealed earlier this month that Mike Ashley was in talks to buy as many as 30 stores from rival Debenhams.
But according to recent reports administrators FRP Advisory have since been appointed by Debenhams’ holding company, Celine Group Holdings.
Mike Ashley’s retail empire came under fire last week as MPs and campaigners urged the billionaire to return taxpayer furlough cash when the business predicted a surge in sales and reported an annual profit of more than £143million.
Frasers Group has refused to hand back the millions it has claimed from the Government’s Job Retention Scheme.
But Frasers is set to benefit even further by claiming up to £18million in ‘job retention bonuses’, which it will become eligible for if it keeps on employing staff that were furloughed.
This year, Frasers placed 18,000 staff on furlough as its shops were shut in late March as a result of lockdown measures.
The job retention bonus is a one-off payment to employers of £1,000 for every employee who remains continuously employed through to 31 January 2021.
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