Sports Direct warns of 'impact' from economic turbulence

Mike Ashley's Sports Direct is facing more currency woes after the firm warned it will take a hit from the devaluation of the euro against the US dollar.

The retailer said its euro/dollar hedging position is due to expire at the end of April and the firm has no hedge in place for the following financial year.

Sports Direct said in a statement: "In response to certain inquiries received by the company in relation to currency, we continue to believe the devaluation of the euro against the dollar will impact on gross margin.

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"Our euro/dollar exchange rate is currently hedged at 1.46, which is due to expire at the end of full year 2017 and we currently have no euro/dollar hedging in place for full year 2018."

The euro is currently trading at around 1.06 US dollars.

The news comes after the firm warned on a profits hit linked to the fall in sterling following the EU referendum, which resulted in half year profits tumbling in December.

As well as the UK, Sports Direct has a presence in Europe through stores in Austria and the Baltic states.

A fall in the euro against the dollar is expected to see an increase in import costs as the firm buys its goods in US currency.

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Sports Direct also sought to clarify its position regarding the acquisition of lingerie firm Agent Provocateur out of administration last week.

"A number of recent press reports have incorrectly stated that Sports Direct has acquired Agent Provocateur.

"In fact, Agent Provocateur has been acquired by Four (Holdings) Limited, a company in which Sports Direct has a shareholding of 25%.

"Some reports have also stated that Sports Direct paid £35million two years ago for a stake in Four Marketing.

"In fact, the amount paid for the shareholding in Four (Holdings) Limited was £8.75million," the company said.