Sports Direct and House of Fraser owner defies cost-of-living gloom

Retail giant said it expected lucrative growth in 2025 and beyond

The company said there had been strong trading momentum in the first half and that had continued into the early weeks of the second half, especially at Sports Direct.

Retail giant Frasers — which owns Sports Direct, Flannels, and Heatons in Ireland — has stuck to its profit goal for the year and said it expected lucrative growth in 2025 and beyond, as the empire majority owned by tycoon Mike Ashley weathers Britain’s cost-of-living crisis.

Frasers, which also owns Lillywhites, Lonsdale, Jack Wills, Evans Cycles, Sofa.com and more, reiterated its goal of adjusted profit before tax at a record £500m (€583m) to £550m for this financial year. 

The company said there had been strong trading momentum in the first half and that had continued into the early weeks of the second half, especially at Sports Direct. 

Frasers has also bought stakes in a range of companies including online fast-fashion outlets Asos and Boohoo and electronics retailers Currys and AO World. 

Founded by Mr Ashley in the 1980s, Frasers has been run by his son-in-law chief, executive Michael Murray, since last year. Mr Murray is pursuing a strategy of upgrading stores to attract the biggest brands while also acquiring stakes in rival retailers and buying smaller distressed brands. 

Bloomberg Intelligence analyst Charles Allen said the guidance for the second half looked broadly flat after such a strong first half.

“Concern about the softer luxury market may explain the caution,” Mr Allen said. He said higher interest costs on adjusted net debt were another reason for prudence.

Frasers has also been seeking to expand in sports retail via its Sports Direct chain. Earlier this year  it tried to buy French sport retailer Go Sport out of administration but lost out to Intersport France. 

It has pledged to pursue German sports retailer SportScheck, even after the business filed for insolvency last week due to the knock-on impact of the insolvency of its parent, property giant Signa. 

“We have a clear ambition to be the leading sports retailer in EMEA [Europe, Middle East and Africa] and we are making progress on broadening our footprint through a focused international M&A strategy,” Mr Murray said. 

Rival retailer Next, which has also bought up swathes of the British main street over the past year, raised its profit guidance last month while Marks & Spencer Group Plc reported progress in its decades-long turnaround. 

• Bloomberg