Sports and fashion chain Sports Direct (LON:SPD) has agreed a deal with Sir Tom Hunter that will see it take an 80% stake in the retail entrepreneur’s USC and Cruise Clothing operations in a cash deal worth £7.0 million. USC currently has 38 stores across the UK and turnover in the 12 months to 30 January 2011 was £70.0 million. Cruise has 10 stores in the UK and an annual turnover of around £20 million. Sports Direct will provide a facility of up to £20 million to enable the existing management teams to develop the two businesses, which enjoy premium market positions.

Sir Tom Hunter has been involved with USC, a top young branded fashion business, since 2004 and he purchased luxury retail company Cruise in December 2010. He will continue as a significant investor in both USC and Cruise, retaining a 20% shareholding, and will remain as chairman of both companies. Sir Tom will also provide strategic guidance to the newly-established Premium and Luxury Lifestyle division of Sports Direct.

USC entered administration in December 2008 and, in a pre-pack deal, Sir Tom’s West Coast Capital investment vehicle bought back 43 of the original 58 stores in the chain. New USC stores are due to open in Swindon and Newbury in the autumn of this year. Sports Direct said the management team would build on excellent supply relationships with brands to enhance store merchandising and stock availability. Shares in Sports Direct rose by 2.2p to 244.7p during the morning.

Sir Tom Hunter said: “This deal will transform the prospects for both USC and Cruise and our employees at a time of extraordinary turbulence in the High Street. I’ve known the Sports Direct team for many years and have huge respect for their talent and look forward to co-investing with them. Sports Direct has a truly exceptional track record in building partnerships with its customers and its staff.”

Dave Forsey, the chief executive of Sports Direct, said: “We are pleased to be taking this opportunity to work with Tom and his teams in the premium and luxury sector of the market. While USC and Cruise will remain independent of Sports Direct, we will support the businesses with our operational expertise.”

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