(Updated on 15 August to correct ownership details in the history section.)

Retail tycoon Mike Ashley's Flannels and Sports Direct will open new flagship stores for the North East in Metrocentre, Gateshead after exchanging contracts with the Metrocentre Partnership, advised by Sovereign Centros. 

Parent company SportsDirect.com Retail Limited has taken the former Debenhams store in the centre's Red Mall for the two brands.

The Metrocentre Partnership has agreed a 15-year lease on the 130,000-square-feet store with the group, which intends to open a 70,000-square-feet Flannels on the ground floor and a 60,000-square-feet Sports Direct on the first floor. Both will open next year. The negotiations for the Metrocentre Partnership were led by its asset manager Sovereign Centros.

At the moment, Flannels occupies a 5,000-square-foot unit on the Upper Red Mall and Sports Direct occupies a retail warehouse elsewhere in Gateshead, which will close when the retailer moves to the Metrocentre.

The former Debenhams store is occupied by Next Home & Beauty, which will consolidate into Next’s existing store in the Green Mall.

Graeme Jones, director at Sovereign Centros, said in a statement: “These lettings will create a new destination point for the centre’s Red Mall. The store sits on one of the main entrances to the centre and therefore important from a visual presentation perspective. The transaction completes a major element of our business plan leasing up surplus former department store space."

The news follows the recent refurbishment of the Town Square and the opening of Harrods' H Beauty in the former House of Fraser store.

Jones added “Retailer interest in the Centre is strong. We are not only attracting new premium brands, but existing retailers are upsizing into new flagship stores. Both JD and H&M upsized earlier this year and are trading really well.”

Lunson Mitchenall and Time Retail advise on Metrocentre.

Sovereign Centros’ appointment as asset manager in October 2020 came close to 34 years to the day since the centre first opened.

The Metrocentre was the brainchild of John Hall, a miner’s son who bought the site for £100,000. When it first opened its doors to the public on 14 October 1986, it became the largest shopping centre in the UK.

With funding from the Church Commissioners, the early phases of Sir John Hall's shopping centre included a Carrefour supermarket, which subsequently became Asda and then Gateway. It was also home to the country’s first out-of-town Marks and Spencer.

The £485 million loan securing the Metrocentre was securitised in the Intu Metro Finance CMBS, which is set to mature in 2023.