Multi-million claim against Rangers over kit sales to go ahead

The case involves an alleged breach of contract over the rights to sell the Rangers kit and replicas

Administrators of a sportswear brand are proceeding with a multi-million pound legal claim against Rangers following a kit sales dispute.

A lawyer acting for the administrators of Elite Sports Group Ltd said it was going ahead with the case at the Court of Session in Edinburgh.

Elite wanted £9.5m compensation over an alleged breach of contract after Rangers signed a deal with Castore.

It claims Elite was contracted to provide the team with kits at the time.

Elite, the exclusive brand partner to Danish sportswear company Hummel, had instructed lawyers to proceed with the case in Edinburgh last November.

It wanted £9.5m from Rangers but Elite went into administration soon after the case called.

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On Thursday, during a short virtual hearing at the court, advocate David Thomson KC said: "During that period of time the administrators have taken the opportunity to assess the oral opposition of the pursuer company and to take advice in relation to this claim and in short the pursuers through the administrators now wish to proceed with the action."

The case arises from a separate legal dispute involving Sports Direct, which was then owned by Mike Ashley and Rangers.

Lawyers for Ashley's company went to the High Court in London seeking an injunction to stop the deal between Elite and Rangers from going ahead.

The deal, which was signed in October 2018, was meant to allow Hummel to supply Rangers with kits and to sell replicas to fans.

However, Judge Lionel Persey QC found that the deal with Hummel - a three-year contract worth £10m - was undertaken without giving Sports Direct a chance to match it.

Compensation claim

Judge Persey ordered that Rangers could not "wear any Official Rangers Technical Products designed by, supplied by, gifted by or manufactured by Elite or Hummel, or bearing the Hummel brand".

Castore is the official technical kit partner of a number of leading teams and athletes including Rangers, McLaren Racing, Newcastle United, England Cricket, US Open Champion Matt Fitzpatrick and Andy Murray. The brand sells into more than 90 countries globally and was valued as being worth £750m in September 2022.

At a hearing last November, Elite won a bid to force Rangers to disclose sales data to them.

On Wednesday, Elite's lawyer David Thomson KC said his clients should be granted access to how many team kits made by Castore had been sold.

The case will be heard at the Court of Session in Edinburgh

Mr Thomson told Lord Braid that he and his colleagues needed to see this information as it would help them prepare their case and see how much they should claim for in compensation.

He told Lord Braid: "It is the pursuer's case that the rug was effectively pulled from under them. It is clear that Rangers entered into an agreement which they didn't perform.

"The amount being sought is currently based on an estimation of sales. If the relevant figures are produced it will allow the claim to be more specific.

"I would ask the court to allow my motion for commission and diligence."

Mr Thomson told Lord Braid that Rangers said to Hummel that it could not continue its contract.

'Materially different'

He said the club then signed a deal with Castore in May 2020 and that this deal breached the terms of the Hummel one. The agreement was reported to be worth £20m and covered five-seasons.

Mr Thomson said the new deal caused Elite to sustain losses which it needed to be compensated for.

He told the court that the figures currently being sought by his clients were based on a report compiled by an expert who works for Deloitte, a financial services company.

He said he needed the actual sales figure from Rangers to help prepare his case.

Gavin MacColl KC for Rangers asked Lord Braid not to grant permission for the Castore sales figures to be released. He said the deals differed in nature and this meant the figures could not be released.

Mr MacColl added: "The contracts are materially different. Castore have a substantial larger number of rights than the pursuer. They are able to sell a greater number of products.

"They operate in a different manner. They are Rangers' full retail partner. Castore are a sports retailer and a sports manufacturer. They are not comparable business models."

Lord Braid allowed Mr Thomson's motion to be granted.

The case will call again at a later date.