The agreement with Frasers Group gives Accent Group a 25 year licence to operate Sports Direct in ANZ. Frasers Group will also increase its holding in Accent Group to 19.6% providing $60 million in funding for the initial phase of the rollout. With a 50 store within six years target, Sports Direct provides a new growth path with additional sourcing and product benefits for the group.

At a time when core footwear banners for Accent Group appear to be reaching maturity and competition is impacting margins, Frasers Group is looking to establish a physical presence via Sport Direct. Sports Direct creates the opportunity for further store growth with category expansion. With weakness in the core from a lower forecast store count and weaker gross margin, we lower our current earnings forecasts for Accent Group. We have increased the probability weighting to a Sports Direct entry to 90%.