Mike Ashley: Will the headline-grabbing Sports Direct boss go quietly?
Frasers Group boss Mike Ashley is to relinquish his position as chief executive of the retail group after decades in the spotlight but there are suggestions the billionaire will continue to call the shots.
The Sports Direct founder will hand over the reins next year to his daughter’s fiancé, Michael Murray, the group confirmed in a financial update.
31-year-old Murray is currently the firm’s “head of elevation”, tasked with modernising the firm’s high street brands including Jack Wills and House of Fraser.
“Without insulting him, by Mike’s own admission he is a bit of a dinosaur. Micheal is young, fresh and youthful and knows what the customer wants. Mike is very good at selling socks,” Chris Wootton, Frasers Group’s chief financial officer told The Times.
The change in leadership will be a chance for the retail group to move away from unsavoury headlines with reports of belligerent business practices dominating coverage of the firm in recent years.
Finance expert Jeffrey Blue accused Ashley of raucous management meetings held in pubs including one instance where the tycoon drank 12 pints and vomited into a fireplace.
The investment banker sued Ashley after alleging the retail boss had agreed to pay him £15m if the company’s shares doubled to £8 at a meeting at the Horse and Groom pub in January 2013.
“These meetings were like no other senior management meeting I had ever attended in all my years of investment banking experience,” Blue told London’s High Court in 2017.
Ashley told the trial he did not recall making any promise to Blue and if he had it would have been “obviously just banter”.
While the businessman won the case, reports of the trial cemented Ashley’s reputation. “The Sports Direct senior management meetings certainly show that Mr Ashley is happy to combine discussion of business matters with the consumption of alcohol,” the judge ruled.
Rise to the top
The billionaire rose to the top after opening Sports Direct’s flagship shop in Maidenhead in 1982 and going on to build a chain of 100 locations by the turn of the millennium.
The business was floated as a public company on the London Stock Exchange in February 2007, where it was valued at £2.5bn.
In recent years the group has acquired a range of retailers on the brink of collapse including Evans Cycles, Jack Wills and Game while a bid to take over the beleaguered Debenhams failed last autumn.
Ashley is the owner of Newcastle FC but has been looking to offload the club in recent months following criticism.
The boss was rapped by Prime Minister Boris Johnson after insisting Sports Direct shop staff continue working during the first national lockdown despite the shutdown of non-essential retail.
“The advice – the instruction – to the gentlemen in question, and every business, is to follow what the government has said, to obey the rules, or to expect the consequences,” Johnson said.
Victorian workhouse
What’s more, the chain faced scrutiny after it was reported that employees faced pressure to work while furloughed, resulting in Ashley publishing an open letter apologising for an “ill-judged” pandemic approach.
The claims sparked shareholder advisory service Pirc to recommend investors to oppose Ashley’s re-election as chief executive of the group in October 2020.
The proxy adviser said the claims were “representative of a corporate culture that does not meet best practice standards with regard to the treatment of employees”.
It was not the first time the retailer came under fire for its labour practices after criticism for using zero-hour contracts and a 2016 parliament inquiry accused Sports Direct of being run by a Victorian workhouse.
A report by the Business, Innovation and Skills (BIS) select committee slammed the company for using “appalling working practices” and treating “workers as commodities rather than as human beings”.
Out of the limelight?
Negative headlines no doubt in mind, the retail brand launched an ‘elevation strategy’ last year with the new name Frasers and a push to give the group a more upmarket image.
“Not every move he has made has been perfect and he is fully aware of that, but he doesn’t mind putting his neck on the line,” retail analyst Richard Hyman told PA.
Ashley was not likely to be “going into the shadows and avoiding the decisions” following the leadership change, Hyman said, suggesting the move was orchestrated to “draw more focus” to Murray’s elevation strategy.
“I really think we need to be careful not to look too much at this company through a corporate lens, because it doesn’t matter what titles they have, this is Mike Ashley’s business and he will have final say.”