Sports Direct invests £20m in Chinese venture

• to sell sports clothes in time for this summer's Olympic Games

Discount sportswear chain Sports Direct, run by the billionaire Mike Ashley, is pouring £20m into selling its wares in the booming Chinese market.

The owner of several sports brands and operator of nearly 500 Sports World shops, yesterday announced a partnership with Chinese retail chain ITAT to sell sports clothes in its biggest stores in time for this summer's Olympic Games. Under the deal with ITAT, dedicated store-within-a-store areas in 120 shops will sell clothes from Sports Directs' family of brands, which includes Everlast, No Fear, Kangol, Slazenger and Dunlop. Sports Direct will receive a proportion of the revenues generated.

The company, founded in the late 1970s by Newcastle United owner Ashley, expects to invest up to £20m between now and April 2009, partly to pay for fitting out the sales areas. It expects minimal impact on earnings in the first full year of operation. The sportswear chain, which has irked investors and analysts alike with its corporate governance and reporting style since flotation a year ago, said developing international distribution channels for its brands was a key part of its strategy.

In an announcement that provided a rare boost to its shares, Sports Direct described China as one of the world's largest consumer markets, with a rapidly urbanising population and growing disposable incomes.

(Guardian)