The high street billionaires Mike Ashley and Philip Day are locked in a shootout for control of Jack Wills, the ‘preppy’ fashion chain which has run into financial trouble.
Sky News has learnt that the tycoons’ companies, Sports Direct International and Edinburgh Woollen Mill Group, are the two remaining bidders for Jack Wills, which was put up for sale last month.
Sources said that a decision about the future ownership of the business was likely in the coming days, and could be made as soon as this weekend.
The situation was fluid on Friday afternoon, with Jack Wills’ owner and advisers considering selling it through a pre-pack administration.
A source close to one of the bidders said a substantial restructuring of the business was “inevitable” whichever one of them acquired it and whether or not a transaction was solvent.
That prognosis is likely to entail significant job losses in due course, adding to the grim toll of retail employees who have found themselves out of a job in recent months.
Sports Direct’s involvement in the auction is likely to alarm the company’s City investors given Mr Ashley’s tirade a week ago about the state of some of the retailers he has acquired in recent times.
In a delayed, chaotic and rambling full-year results announcement, Mr Ashley described House of Fraser’s problems as potentially “terminal” less than a year after he acquired the department store chain out of administration.
In the last 12 months, Mr Ashley has also engineered takeovers of Evans Cycles and Sofa.com, as well as mounting unsuccessful bids for Debenhams, HMV and the collapsed cafe chain Patisserie Valerie.
The Newcastle United owner’s retail empire also owns stakes in French Connection and Goals Soccer Centres, which on Friday confirmed a Sky News report that an accounting scandal would force it to delist from the stock market.
Mr Ashley’s involvement in the auction of Jack Wills, which employs 1,800 people and trades from 110 of its own stores, threatens to further strain his fragile relationship with the City.
He has repeatedly denied any intention to take Sports Direct private, going so far as to say last week that being listed gave him “discipline”.
“Imagine if I was private, I’d be uncontrollable.”
He faces stiff competition to buy Jack Wills in the shape of the formidable Mr Day.
The reclusive businessman’s EWM Group has acquired brands including Jaeger and Peacocks, and has just taken control of Bonmarche, the listed fashion business.
Jack Wills is owned by BlueGem, an investment firm which has backed a number of UK retailers.
BlueGem is unlikely to see a return from the sale of Jack Wills, with one of the other possibilities remaining that an acquirer could take control of its lenders’ debt position.
The long-term position of Suzanne Harlow, the former Debenhams executive who took over as Jack Wills’ chief executive last September, is unclear.
Jack Wills has already received more than £20m in additional funding to keep it afloat during the last year.
If it does get sold through a pre-pack process, through which some of its liabilities would be left behind, it would join chains including Poundworld, Debenhams and HMV in having experienced a stint in administration during the current retail crisis.
Jack Wills, KPMG, Sports Direct and EWM all declined to comment on Friday.