Retailing billionaire Mike Ashley has pushed one of his Sports Direct subsidiaries into administration.
Administrators at niche accountancy firm Gallaghers were appointed to Gilesports earlier this month.
Cardiff-based Gilesports, acquired by Sports Direct in 2005, has been struggling for several years.
The retailer, which once had a portfolio of around 80 stores, has been paying only rates on its stores since 2008 after ruling them no longer “commercially attractive to trade from”.
Several of the larger stores are understood to have been passed over to other Sports Direct brands since Ashley’s acquisition of the firm.
The last filed set of accounts, to April 2010, reveal that parent company, Ashley’s £3.6bn Mash Holdings, has withdrawn its support. They also show that, at April 2010, Gilesports had onerous leases of almost £9m.
One landlord said: “I don’t know if this is something that Sports Direct has done to exit its remaining leases or because of dilapidations, but it does make a mockery of lease agreements when a profitable retailer can just cut off its loss-making subsidiary.”
Another added: “This sort of practice should be made illegal. It’s just not right that a massively profitable company can choose to fold a division.”
In 2008, Topshop boss Sir Philip Green angered landlords when he placed Matte, a company related to his Arcadia empire, into administration in a bid to renegotiate terms across its 25 leases.
The property community is becoming increasingly critical of tactics by profitable firms to reduce their rents or hand back underperforming sites.
Last week, the British Property Federation called for a review of the company voluntary arrangement rescue method after Travelodge, which last year posted profit of £55m, proposed its use to offload as much as 10% of its 500-strong portfolio.
Gallaghers was unable to comment until after a creditors meeting, expected next month.
Sports Direct did not respond to enquiries.
