Shares of Frasers Group PLC (LON: FRAS) slipped 0.5% in London trading today after the retailer acquired a part of assets of Dave Whelan’s DW Sports for £37 million.

Mike Ashley’s Frasers Group agreed to pay £37 million to purchase a part of DW Sports’ assets. DW Sports is in administration, hence 922 employees are saved from losing their jobs. The retailer collapsed into administration earlier in August as the company’s income was wiped out due to coronavirus lockdown. 

Under the terms of the deal, Mike Ashley’s Frasers Group took over 40 leisure clubs and 31 shops that were owned by DW Sports, plus three more clubs that can’t be reopened at the moment due to coronavirus restrictions. 

However, the name of the business, which was founded by former footballer Dave Whelan, wasn’t included in the deal. Dave Whelan’s DW Sports was once a rival of Mike Ashley in the sportswear industry. 

At the time of the collapse, DW Sports owned 72 leisure clubs and 50 retail stores in the United Kingdom and around 1,800 employees, said administrators at BDO. Shortly before the collapse, the company closed a number of stores and an additional 19 stores and 29 leisure clubs since the administration.

However, some of the stores “may additionally be reopened… in due course” by the new owner, the administrator noted.

The company is currently focused on the Sports Direct retail chain and wants to focus on the upmarket in the future under its new “elevation” strategy. 

Frasers Group share price slipped nearly 1% on Monday, despite the news that Ashley purchased some assets of DW Sports. It is likely that the stock price didn’t react to today’s news as media speculation started last week. 

Shares of Frasers Group gained over 22% last week on the better-than-expected performance. The stock price closed above the 200-WMA at GBX329, which will now act as support should the price action turn lower from here. 

Mike Ashley’s Frasers Group has purchased some of DW Sports assets that collapsed into administration earlier this month for £37 million, saving 922 jobs. 

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