Sports Direct and Tesco are reportedly close to agreeing a space-sharing deal that would give the sports chain space at some of the grocer's biggest stores.
Sports Direct - controlled by Newcastle United owner Mike Ashley - could take the mezzanine floors in three of Tesco's UK hypermarkets and is looking at other opportunities, the Financial Times said.
The move would allow it to benefit from customer traffic to Tesco, while the supermarket would be able to shed space to a non-competing retailer.
Tesco chief executive Philip Clarke is thought to be grappling with what do with many of the chain's larger stores as demand for non-food items moves to the internet and consumers switch to smaller, local stores.
Tesco has already acquired restaurant chain Giraffe and coffee business Harris + Hoole with a view to utilising them in larger stores.
A refurbishment in the Czech Republic cut the size of a hypermarket by 30,000 sq ft, with Sports Direct taking the bulk of the excess space.
