Sports Direct to shut down third of USC stores

Following in the footsteps of troubled teen retailer Wet Seal, Sports Direct is reportedly preparing to shut down a third of its USC stores, endangering hundred of jobs at the apparel retailer.

The company's directors, who are led by Dave Forsey, Sports Direct chief executive, filed a notice of intention to appoint receivers at the High Court on January 6, which means that stores could be closed down as soon as next week.

Worst performing USC stores to be shut down

A official notice of intention usually allows a company a grace period of ten days before it has to declare insolvency. Sports Direct is currently thought to have over 1,000 employees working at 90 USC stores. It is rumoured that Sports Direct aims to shut a third of USC worst performing stores, whilst the remaining stores continue to trade.

Dozen of members of staff at one of USC's warehouse in Dundonald, Scotland have reportedly already been told they are being made redundant, whilst Duff and Phelps, an bankruptcy specialist and Gallaghers, a law firm, have been asked to jointly oversee any potential shut down. The warehouse employs roughly 100 members, who were not informed why they were being made redundant, as trucks from Sports Direct moved goods to another location in Shirebrook, Nottingham on Wednesday.

According to the Telegraph, which claims to have seen court documents, Sports Direct decision to file with the High Court was encouraged by Diesel, who was demanding repayments for unpaid debts. On December 23, 2014 at a meeting of USC's directors which was chaired by Forsey, the board agreed that the company would be unable to pay its debt to Diesel, after the end of their 15 year partnership.

Sports Direct, which is owned by billionaire Mike Ashley who holds a 58 percent share, currently owns a series of high street retailers Lillywhites, Flannels, Pulp and Cruise.