Frasers Group has today confirmed speculation that Mike Ashley will step down from leading his retail empire and hand the reins to his future son-in-law.
The company behind Sports Direct, House of Fraser, and various other retail brands said talks were underway for the 31-year old Michael Murray to succeed the billionaire on 1 May 2022. Ashley would relinquish the Chief Executive role but remain on the company’s board as an Executive Director.
Murray, engaged to be married to Ashley’s daughter Anna, is currently ‘head of elevation’ at Frasers, tasked with modernising the business and creating a more upmarket image.
Last month, Murray said Ashley was “not involved” in the future of the business and that he was among a group of young senior executives responsible for delivering Frasers Group’s turnaround plans.
Speaking to The Times today, Chris Wootton, Frasers Group’s finance chief confirmed that the direction of travel to hand over more power to Murray had been in place for a while.
“Without insulting him, by Mike’s own admission he is a bit of a dinosaur. Michael is young, fresh and youthful and knows what the customer wants. Mike is very good at selling socks,” he said.
In a stock market statement, the company said it was “currently proposed” that Murray would assume the CEO role, with a reward and remuneration package now being considered.
Ashley founded Sports Direct in 1982 and retains 64% of the group. In recent years, he has snapped up a number of distressed retail brands including House of Fraser, Evans Cycles, Jack Wills, and Game. The Frasers Group is now worth around £3bn and operates almost 1,000 shops.
The planned leadership change was announced alongside the group’s latest annual trading figures which showed its revenues had fallen 8.4% to £3.63bn over the 12 months to 25 April 2021.
Its main sports retail division saw sales slide 10.7% to £1.97bn due to temporary store closures during the Covid lockdowns.
Pre-tax profits plummeted 94.1% to £8.5m after the company wrote down the value of stores and investment properties by £85m amid the switch towards online shopping during the pandemic. However, EBITDA was only 2.6% to £536.5m.
Ashley commented: “Our stores in the UK have reopened above expectations and our online channel continues to significantly outperform pre-Covid-19 periods.
“Nonetheless, management remains of the view that there is a high risk of future Covid-19 pandemic restrictions, likely to be over this winter and maybe beyond.”
The group closed five House of Fraser stores during the year, taking the total to 43, down from almost 60 when it was acquired three years ago.
Chairman David Daly warned that more House of Fraser stores may have to close if there was a return to full business rates, after the tax holiday during the past year. He said the company wanted to take on former Debenhams outlets but “excessive business rates” made the viability of such investments less likely.
“There must be a change to the outdated business rates system for us to justify the survival of some of these House of Fraser stores,” Daly said.
