A penny for your thoughts, Mr Ashley?

The Sports Direct tycoon is well known for keeping rivals guessing. Simon Neville attempts to unravel his stakebuilding plan for Debenhams

Mike Ashley has mellowed in recent years, so his stake in Debenhams surprised the City (Stu Forster/Getty Images)

When Mike Ashley floated his pile 'em high, sell it cheap sporting empire in 2007, he found himself sitting on a cash pile just short of £1bn.

At the time he was fond of throwing caution (and cash) to the wind, driving a spending spree that saw him blow hundreds of millions on brands, retailers and high-rolling casino bets. Not to mention Newcastle United. Some worked out. Many didn't.

But the 49-year-old appears to have mellowed in middle age, with a series of astute investments aimed at growing his businesses and earning serious money. But his latest investment surprised the City yesterday as his Sports Direct business snapped up a 4.6 per cent stake in the struggling department store Debenhams.

With Mr Ashley not known for coming forward to explain the rationale behind his deals, we put forward the most likely reasons for this £45m high-street gamble.

A fast buck

Debenhams shares have traded dreadfully over the last 12 months, so this could be an opportunity to make some money, quick. Buy the shares now while they're low (they've fallen 31 per cent in the past year, sunk by poor results and two profit warnings), wait for them to rise, then sell them and take the profits.

Mr Ashley is known to make the odd business bet, with some notable successes and failures.He famously lost an estimated £200m in 2008 after a spread-betting exercise involving a bet that HBOS shares would rise, while his deal to buy Newcastle United FC was supposed to be a quick money-spinning exercise. Unfortunately for him, his hoped-for buyer failed to materialise.

Shareholdings in Blacks and JJB Sports had mixed success.

Other deals have paid off – eight weeks owning a significant stake in Adidas saw a substantial return as shares jumped before he sold them. Meanwhile, Sports Direct is the third-biggest shareholder in JD Sports, with an 11.9 per cent stake. Mr Ashley's business benefits from the impressive growth of its rival.

Get his brands into Debenhams

The department store has struggled to attract some of the biggest name brands in recent years and said it would be "open minded" to working with Sports Direct, while Mr Ashley's company said it wants to work closely with the Debenhams board on its operations.

That suggests Sports Direct is keen to get some of its biggest fashion brands, including Kangol, Cruise, Van Mildert, and Hot Tuna into Debenhams stores to bring them to a larger audience.

Freddie George, retail analyst at Cantor Fitzgerald, also suggests: "It [Sports Direct] apparently wishes to explore options at an operational level to work together with Debenhams. This would imply to us that the company is potentially considering splitting the fashion assortment from the sports ranges in its stores over the medium term."

Protect the distribution of brands into his chains

If Cantor is right and Mr Ashley wants to split the group it would allow for greater focus on the sports brands in Sports Direct stores – remember, Sports Direct also owns Republic, USC and Flannels, among other fashion stores.

A recent battle with Adidas has left him bruised as the German sporting brand said it would not supply Sports Direct the Chelsea FC kit from next year, with some suggestions that Adidas did not want to be in "shabby" stores.

Stripping out fashion brands for Sports Direct could mean more shop floor for the sports brands it owns, including Dunlop, Slazenger and Everlast, at the expense of the stuff Adidas is happy for Sports Direct to sell.

Click and collect

Sports Direct has been a success story for the high street – bar the use of zero hours contracts for 90 per cent of its staff – but has been let down by its internet offering. A deal with Debenhams could see Sports Direct use some of the expertise and systems put in place by the department store.

Analysts at Oriel said: "The glaring hole in Sports Direct's online operation is that it doesn't offer click and collect, and using Debenhams' 156-store network to help this may be the plan. Presumably Debenhams would hope to benefit from the footfall."

It goes on: "Debenhams has just shy of 12 million square feet in the UK and thus provides great access to a UK shopper that is clearly embracing the internet with ever-greater enthusiasm."

Buy the business outright

Most would not put it past Mr Ashley to eye up a full-scale takeover of Debenhams. After all, this is the man who spent time looking over House of Fraser for a possible purchase last year before deciding against it. HoF is probably out of reach now, with exclusive talks still taking place with French firm Galeries Lafayette, so Debenhams could be an attractive alternative.

It would not be the first time Mr Ashley has snapped up struggling companies lock, stock and barrel. So shrewd were his takeovers of collapsed retailers including JJB Sports, Republic, USC and an attempted takeover of Blacks, that he quickly shot to the top of call lists for administrators looking to offload distressed companies. With the exception of Newcastle United and Blacks, Mr Ashley has a habit of making acquisitions pay off. And that is not a claim that many bosses can make.