Mike Ashley to seek turnover rents across Sports Direct Portfolio

Sports Direct owner Mike Ashley is reportedly seeking rent agreements with landlords that will see them linked to store performance.

According to the The Sunday Times, Ashley has asked landlords to turnover rent agreements that will see up to 15% of the rent paid linked to store sales. It is believed that currently Ashley is only seeking the new type of rent agreements at new stores and also those where the current agreement is coming to an end.

Turnover rents are common practice in the US with clothing retailers H&M and Inditex known to use them across their store portfolios. Ashley’s Sports Direct estate currently amounts to over 700 stores including Sports Direct, House of Fraser and Flannels.

The news comes after Ashley’s holding company, Mash Holdings, saw pre-tax profits plunge by 80% to £20.9m in 2018, according to recently filed accounts on Companies House.

The group attributed the profits decline to its performance during the 2017 financial year, when the company saw increased profits from the sales of Dunlop and shares in JD Sports, for which there was “no similar income in 2018”.

Sports Direct has been contacted for comment.