Frasers Group has pulled out of the deal to take over Germany’s SportScheck, which it had initially agreed to buy in October.
The moves comes after the German retailer filed for insolvency, which followed its parent company Signa Holding filing for administration earlier this week.
Frasers said that it was “disappointed” by the SportScheck’s insolvency, but that it hoped to still buy the sports retailer’s business or assets out of administration.
UK retail group Frasers agreed a takeover of SportScheck with its parent company Signa Retail Department Store Holding in October. It did not reveal how much it planned to pay for the business.
SportScheck has 34 shops in Germany and brings in revenues of around €350 million (£303 million).
“SportScheck GmbH has today filed for insolvency. Frasers has exercised its rights under the agreement to withdraw from the transaction,” Frasers told shareholders on Thursday.
“While Frasers is disappointed by the insolvency of SportScheck, it continues to believe that SportScheck is an attractive asset in one of Europe’s most important markets for sports and it intends to work with the appointed preliminary insolvency administrator of SportScheck with a view to acquiring the SportScheck business/assets out of administration,” Frasers said in a statement.
On Wednesday this week, Austria’s Signa Holding, which owns part of London’s Selfridges and properties around the world, filed for administration.
Two weeks ago the company sold part of its share in Selfridges to Thailand’s Central Group. This deal happened after Signa, which was built by Austrian investor Rene Benko, called in restructuring experts.
Benko was ousted earlier in November as the company tried to secure its future. Signa also owns part of New York’s Chrysler Building.
Frasers is the parent company of House of Fraser, Flannels and Sports Direct among others. It had said that the deal to buy SportScheck would be a big boost to its presence in Germany and the deal was hailed by Bjorn Gulden, CEO of key supplier Adidas.
Gulden said when the deal was announced that Frasers CEO Michael Murray’s elevation of the group and of Sports Direct had been “impressive”.
“The acquisition of SportScheck is another big commitment to the sports industry and a natural evolution in their strategy of becoming a global player. We are committed and excited to support Sports Direct on their journey,” Gulden said.
Main image: Sports Direct Manchester