Mike Ashley adds new discount chain MegaValue to Sports Direct Group

Billionaire Mike Ashley is on the prowl again on the UK high street and has quietly launched a new discount store named 'MegaValue' in a bid to snare a larger slice of the growing discounting market.

The new value store concept opened in Kidderminster, Worcestershire at the site of a former department store this weekend, reported the The Mail on Sunday, and bears similarities to a B&M or Wilkinson. The discount store is said to be Ashley's first venture outside of the fashion and sports sector, with MegaValue's slogan claiming it will "beat anyone's price - guaranteed," it is apparent that the owner of Newcastle United is keen to expand the Sports Direct business into new markets.

Mike Ashley opens discount store 'MegaValue'

According to Companies House records, Megavalue.com was registered as a private limited company last month, with Sports Direct listed as its shareholders and its chief executive David Forsey named as company director. A second company, named Megavaluedirect.com, has also been registered under the same conditions, with a website under the same name set to go live soon and redirecting current visitors to the store in Worcestershire.

The new discount store launch emerges as Shop Direct revealed the imminent closure of Woolworth's website​, as the group previously acquired the rights to the name following the chain's closure in 2008. "People in the industry are calling [Ashley’s venture] 'Son of Woolworths' and the fact that it is launching virtually on the day the Woolworths site has closed will not be lost on people," commented an unknown senior retail source.

"Its assortment of products is virtually identical to what you would have once found in the stores – toys, kitchen and home products, pets and DIY. The whole thing also screams low price." The discount store concept is said to be part of an overall strategy at the Sports Direct Group to try out new formats as well as new avenues for growth outside of the sportswear market.

In the past Ashley has considered potential department store acquisitions, including House of Fraser, which was taken over by Chinese conglomerate Sanpower in a 480 million pounds deal. Ashley still retains an 11 percent stake in the department store group, as well as an estimated 10 percent stake in Debenhams, allowing him a number of avenues to test different formats in both the higher end of the retail market as well as the lower end.

Ashley has also slowly developed a widespread fashion business model, which includes the likes of Republic, USC as well as the higher end Flannels and Cruise.