Mike Ashley loosens control as he steps down from Sports Direct-owner Frasers

He says the move will see him remain '100% committed' to the business once he leaves shareholders board

Tue, 20 Sep, 2022 - 15:51

Katie Linsell

Mike Ashley is stepping down from the board of Frasers Group four decades after he founded his retail business, and just months after son-in-law Michael Murray became chief executive of the Sports Direct owner.

The 58-year-old still holds an almost 70% stake in Frasers, and said he remains “100% committed” to the business even though he won’t seek re-election at next month’s shareholder meeting. He said his support as a shareholder is stronger than ever.

Mr Ashley will be available in an advisory capacity and will provide the company with an additional £100m (€114m) of funding on the same terms as its borrowing facilities. The unpredictable retail tycoon started the business with one store outside London, under the name Mike Ashley Sports, in 1982.

His decision marks another definitive move away from his company after Mr Murray, 33, took over as chief executive officer in May, succeeding his father-in-law. Mr Murray married Ashley’s daughter, Anna, this summer.

Since joining, Mr Murray has focused on upgrading stores, and the extra funding from Mr Ashley is intended to support this strategy of investment in retailing. Under Mr Ashley, Frasers has grown from the main Sports Direct brand. The group now includes premium brands at Flannels and House of Fraser as well as previous acquisitions Game, Evans Cycles, and Jack Wills.

In Ireland, it also owns Heatons, and plans to open Flannels at the new Clery's centre in Dublin.

It will be interesting to see if Frasers acquires fewer stakes in other retailers after Mr Ashley’s departure, said Clive Black, a retail analyst at Shore Capital. The company may focus more on its existing business, though Mr Ashley’s influence will surely remain, he said.

"He is a major shareholder and he’s also a lender to the business,” said Mr Black.

It would be naive to think that Mike Ashley’s influence on Frasers has materially eroded.

So far, the company hasn’t lost any of its acquisitive flair since Mr Ashley stepped back. Earlier this year Frasers bought online brand Missguided, raised its stake in German fashion retailer Hugo Boss, acquired a stake in Australian fashion marketplace MySale. The company also bought Studio Retail Group in February.

Mr Ashley’s bid to take over struggling department store chain Debenhams in 2019, in which he held a roughly 30% stake, was marked by a series of fiery public retorts to management, calling for the board to take lie-detector tests and for advisers to be put in prison.

By comparison, Mr Murray cuts a more polished image. Under his watch Frasers reported bumper profits in July and said it expects to grow further this year.