Sports Direct owner acquired Agent Provocateur

British lingerie brand Agent Provocateur is now Four Marketing’s property. The latter is controversial entrepreneur Mike Ashley’s investment firm. He is known as the founder of sports store chain Sports Direct and owner of Newcastle, a football team in the English Championship. 

Accounting scandal

Mike Ashley apparently paid an estimated 27.5 million pounds (32 million euro), outbidding investment firm Lion Capital. Its previous owner, investment firm 3i, paid 60 million pounds (about 90 million euro back then) to acquire Agent Provocateur in 2007.

The lingerie brand has been in financial turmoil for quite a while and was even caught up in an accounting scandal late last year, which forced chairman Chris Woodhouse to resign. The entire situation prompted 3i to restructure the brand and put it up for sale.

The acquisition is a so-called “prepack arrangement”, settling the restart in 1 day and guaranteeing continuity and job security. It also limits negative publicity to a bare minimum, but most of the time, only the viable business units are kept. This is exactly why prepacks have faced a lot of criticism, because it gives companies an opportunity to easily shed their debt.

Founder’s criticism

Agent Provocateur’s co-founder and designer Vivianne Westwood’s son, Joe Corré, is abhorred by Ashley’s acquisition. He calls it “preposterous” and says Ashley and 3i should expect a lot of court cases regarding this deal.

“The pre-pack arrangement between 3i and Mike Ashley’s Sports Direct is a disgrace to British business. If this preposterous deal goes ahead with Mike Ashley, 3i’s reputation is going to be left in tatters. I don’t think they will ever recover from this”, he told British paper The Guardian.