The Accent Group Ltd (ASX: AX1) share price is up 3% after the footwear and apparel stock announced a partnership with Frasers Group to launch Sports Direct.
Accent has its own footwear and apparel businesses, such as The Athlete’s Foot, Stylerunner and Platypus. It’s also a distributor of global brands such as Vans, Hoka, Skechers and Dr Martens.
Frasers is one of the world’s largest owners and retailers of sports, premium and luxury brands, with more than 1,500 stores in over 30 countries.
Frasers Group agreement for Sports Direct
Accent will be granted the right to launch and operate the Sports Direct business (including online) in ANZ for an initial 25-year term.
The ASX share plans to initially roll-out at least 50 Sports Direct stores over the next six years. It ultimately sees an opportunity for at least 100 Sports Direct stores in Australia. Accent said the initial capital and operating cost expenditure will be “substantial”.
Accent will gain access to Frasers’ owned brand portfolio to sell within Sports Direct and other Accent stores. That includes Everlast, Lonsdale, Slazenger, Karrimor, USA Pro and Hot Tuna.
The arrangement with Frasers also involves Accent acquiring Frasers’ discount online fashion marketplace called MySale to consolidate Frasers’ Australian operations into Accent and extend its online presence.
Frasers will subscribe for 35,186,695 new shares at an Accent share price of $1.718, representing a 3.5% discount to Accent’s closing price on 11 April 2025. These proceeds totalling $60.4 million will be used to fund the initial roll-out of Sports Direct businesses in Australia and New Zealand.
Frasers will not be entitled to exceed a 26% relevant interest in Accent’s shares for three years after the completion of the new share issue, subject to certain conditions (such as making a takeover offer) and various other conditions regarding Accent’s board.
New CEO agreement
Accent has also entered into a new employment agreement with Daniel Agostinelli to remain as the CEO for at least another three years.
Final thoughts on the Accent share price
Despite Frasers buying discounted newly issued Accent shares, the share price is still up, so investors clearly like the deal. I think this is a good time to invest at the beaten-up price – the Sports Direct business could boost profits in the longer-term.
It’s one of the ASX dividend shares I’d be looking at right now.
