Mike Ashley is stepping down from Frasers Group board, but Sports Direct founder leaves lasting legacy
Mike Ashley to step down from Frasers Group board
Mike Ashley’s retreat from the public face of the business he founded is a return to form for the reclusive retailer.
Before his group, then called Sports Direct, floated on the stock exchange in 2007, the only pictures of Ashley available were those from his days as a county squash player back in the 1970s.
Even after the company listed, Ashley left much of the dealings with the City to his then chief executive Dave Forsey, although it was clear that he still led the decision-making behind the scenes.
Now Michael Murray, Ashley’s son-in-law and acolyte, is taking the spotlight as chief executive of Frasers Group, the empire that has grown to embrace House of Fraser, Jack Wills, Flannels and Evans Cycles. While Ashley is leaving the board, the business remains his baby. He will continue to control it via a near 70% stake pumped up by years of share buy-backs.
Brought up in Burnham, Buckinghamshire, Ashley began his retailing career helping out in the shop in his Maidenhead squash club after injury scuppered any hopes of making a living from the sport he had played at county-level as a teen.
He opened his own shop in 1982 with £10,000 backing from his family and by the late 1990s had embarked on an ambitious expansion.
Sports Direct was able to undercut bigger rivals by heavily discounting must-have Nike and Adidas gear, and by snapping up once admired sports brands that had fallen on hard times, such as Donnay, Lonsdale and Dunlop Slazenger, and slathering their names over cheap but profitable gear.
That strategy helped Ashley swallow up smaller rivals, taking his small chain national. He was helped by a tight team of loyal workers, including his brother.
In 2000, as head of a fast-growing but still relatively small player, Ashley was summoned to the Cheshire home of David Hughes, the chairman of the now defunct Allsports chain, to discuss the pricing of a new Manchester United kit. Dave Whelan, then boss of the rival JJB chain, mistook the casually attired Ashley for the gardener before compounding the insult by reportedly telling him: “There’s a club in the north, son, and you’re not part of it.”
Ashley then turned whistleblower, reporting his rivals to the Office of Fair Trading for fixing the price of replica football shirts, which led to dawn raids and multimillion-pound fines.
In time, Allsports and JJB Sports collapsed, leaving only JD Sports and France’s Decathlon as sizeable peers.
It wasn’t until Forsey departed in 2016, amid mounting criticism of Sports Direct’s working practices and corporate governance, that Ashley stepped forward. His relationship with the City, the media and even business associates has been rocky.
He has faced several shareholder rebellions over his choice of chairman and the treatment of workers in the light of a Guardian undercover investigation.
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A vote against former chair Keith Hellawell came shortly after it emerged that Sports Direct had been paying a company owned by Mike Ashley’s brother to deliver online orders outside the UK.
Further controversies include a very public spat with the owners of Debenhams, after Ashley spent £150m on a stake in the department store only to see it fall into administration.
In 2017, former adviser Jeff Blue claimed during a court battle – which Ashley won – that the entrepreneur had vomited into a fireplace after a management meeting that was “effectively a pub lock-in” and would take naps under tables at “boring” meetings.
Sports Direct’s long-term auditor, Grant Thornton, resigned after the group stunned investors by repeatedly delaying its annual results before eventually publishing them late on a Friday. The late publication included the bombshell revelation of a €674m (£605m) potential tax bill from the Belgian authorities.
Murray has attempted to smooth over wrinkles, consolidating a move upmarket with the expansion of the Flannels-branded casualwear chain and improvements to Sports Direct stores. He has also continued slimming down the House of Fraser chain, bought out of administration in 2018, and expanded the group’s online capabilities with the buyout of Missguided and Studio Retail.
While Murray clearly has ideas of his own and will be driving the business day to day, it’s likely Ashley will continue to keep a hand on the gear stick.
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