The UK sportswear retailer’s pre-tax profit slumped 73% to 77.5 million pounds (RM409.9 million) in the year ended April 29, the company said on Thursday. The drop was mainly due to a one-time charge of 85.4 million pounds (RM451.8 million) related to its investment in struggling department store chain Debenhams Plc. Sports Direct’s shares dropped as much as 12%.

Debenhams shares hit all-time lows this week after a newspaper report that the company had lost credit insurance reignited fears over its ability to survive a tough trading market for the UK’s traditional retailers. In March, Sports Direct increased its holding in Debenhams to 29.7%, just below the level at which it would be required to bid for the entire company.

“We obviously didn’t predict Debenhams would be under this much pressure,” Sports Direct’s head of investments Liam Rowley said in a phone interview. “Time is clearly not on our side. With the online tsunami coming, bricks-and-mortar retailers need to collaborate.”

After the UK retail crisis claimed Toys ‘R’ Us UK, electronics retailer Maplin, and discounter Poundworld this year, Ashley’s investments in other UK retailers is coming in to sharper focus. Brick-and-mortar chains are struggling with a slowdown in consumer spending, the rise of e-commerce, and soaring costs.

Sports Direct is shutting dozens of old stores and opening more modern and spacious outlets. Ashley is hoping to fill that space with the latest ranges from Nike Inc and Adidas AG, who still don’t supply all of their best products to Sports Direct, which is known for selling house brands at cheap prices.

Chief Financial Officer Jon Kempster said the retailer was very happy with how the new outlets have been trading. Sports Direct invested 140 million pounds (RM740 million) in property last year and expects to spend around 300 million pounds (RM1.6 billion) this year.