Rangers retail 'dispute' with Mike Ashley escalates

The owners of Rangers FC have stepped up pressure on Mike Ashley of Sports Direct to break their joint venture for selling club kits and merchandise.

One of Mr Ashley's firms owns 49% of Rangers Retail. There is a break clause requiring seven years' notice.

Rangers have now withdrawn the rights to use club trademarks.

This appears to make it impossible for Rangers Retail to continue selling branded goods, and may even be intended to provoke a legal challenge.

The retail venture was set up under the previous management board at Ibrox.

Legal challenge

Ibrox bosses and Mr Ashley have been in dispute over the changed relationship when the previous regime was forced to give way to current Rangers chairman Dave King.

The current board has been trying to get out of the contract with Mr Ashley's company, announcing in March that it intended to break the deal.

Mr Ashley recently announced he is dropping a legal case involving pursuit of Mr King's suitability as chairman, given his admission to large-scale tax evasion in South Africa.

He had also sought unsuccessfully to have Mr King jailed for contempt of court, alleging the chairman had broken the terms of a court ruling on maintaining confidentiality around the retail deal.

Mike Ashley (left) had challenged the SFA over Dave King's involvement with Rangers

In March, Mr King said the contract over Rangers Retail had been negotiated four years ago by representatives of the Ibrox club who had "a clear conflict of interest".

Having served notice on the seven-year break clause, Rangers have failed to get movement from Mr Ashley and the company that has the 49% stake, SDI Retail.

The latest statement from the Rangers board says it is withdrawing permission for Rangers Retail to use intellectual property rights under licence - even though it owns 51% of that retail company.

"The club now needs to speak to its commercial partners to agree the next steps flowing from the termination and will make no further comment on this matter whilst discussions are ongoing.

"The club will endeavour to communicate further with its supporters and customers for Rangers Kit and other Rangers products as soon as it is in a position to do so."

Previous board

With majority control of the company, it is possible that Rangers could close down its retail outlets and online sales.

That could, in turn, provoke a legal challenge from Mr Ashley and force him into court to defend the deal he struck with the previous Rangers board.

Part of the calculation at Rangers may be that this adds to pressure on Mr Ashley as he faces difficulties with his stake in Newcastle Football Club.

Footballing rules state that individuals cannot have a financial interest in two British clubs. And since Newcastle's relegation from the top flight of English football to the second tier, it faces tougher rules on ownership.

Mr Ashley is also under pressure from MPs, who are focusing parliamentary inquiries on his employment practices at Sports Direct warehouses.