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Sports Direct Sells Off Its Dunlop Brand

Dunlop, a Sports Direct brand, is now in the hands of another major company.

U.K.-based retailer Sports Direct signed an agreement to sell its Dunlop business to Sumitomo Rubber Industries Ltd. (SRI) for a cash consideration of $137.5 million. A new company, Dunlop International Co. Ltd. and its sports business subsidiary, Dunlop Sports Co. Ltd. will operate once the transaction is completed.

SRI’s global presence will majorly benefit from the acquisition and shift its position to licensor in 86 nations, including Brazil and South Africa. Under the new agreement, SRI will oversee all manufacturing and sales of Dunlop sporting goods in other countries, except for Japan, South Korea and Taiwan, where SRI already owns Dunlop’s trademark rights.

Along with the transaction, SRI will also provide Sports Direct with a royalty free license, which permits Sports Direct to use Dunlop for its own retail purposes. SRI has the option to take over these rights in the future for $12.5 million.

Sports Direct’s Dunlop divestment is timely with the retailer’s rebranding efforts. With the goal of becoming the “Selfridges” of sports retail, Sports Direct aims to refocus its core U.K. business and facilitate relationships with third-party brands. With the sale’s proceeds, Sports Direct will foster more partnerships to build its market presence.

The Dunlop Business currently operates in Asia, Canada, Europe and the U.S. For the year ended April 24, 2016, Dunlop brought in a combined revenue of $44.5 million and gross assets of $43.5 million.

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