End of an era as Sports Direct founder Mike Ashley quits

Power drinker, football club owner, takeover specialist: the shutters are falling on the ‘misfit’ boardroom career of one of the High Street’s most colorful figures.

Mike Ashley has revealed he will step down next month as president of Frasers Group, the sprawling retail empire he started with a single store four decades ago.

Ashley still owns 69 percent of Frasers. And his son-in-law Michael Murray is the chief executive.

Still, the announcement that he will not be re-elected to the board of directors at this month’s annual general meeting was deemed ‘seismic’.

The city was not always in a good mood for Ashley, who first led his sportswear company into the FTSE 100 nine years ago.

But shares fell after news of his departure – by 1.2 percent or 9p to 777p. “I am confident in passing the baton to Michael and his team,” said Ashley, who remains available to the board as an advisor. “I am looking forward to helping the team. My commitment and support as a Frasers shareholder remains strong.’

That commitment was demonstrated with a £100m loan from Ashley to the company.

It remains to be seen how important his step aside really is.

Murray has been officially chief executive since May.

Still, the company’s moves since then — acquiring fashion website Missguided and attempts to buy Australian site MySale and reportedly upscale tailor Gieves & Hawkes — have resembled the classic Ashley.

In recent years, when Ashley held the role of executive deputy chairman, few doubted that he was the one in charge.

This time, however, looks different, according to veteran retail analyst Richard Hyman, who said the latest announcement seemed to formalize Ashley’s separation from day-to-day involvement.

“It marks a clear change in a way that previous announcements didn’t quite do,” Hyman said. But for the biggest decisions, Ashley would “certainly be involved as he is still the predominant shareholder,” he added.

“His son-in-law would be crazy not to take his advice—and Ashley’s not the kind of guy to give up the wheel completely,” Hyman said.

Ashley started the business in Maidenhead in 1982 and after rapidly expanding to over 400 stores it was listed as Sports Direct in 2007 with a valuation of over £2 billion.

The company first entered the FTSE 100 index in 2013, later falling into the FTSE 250 after falling in value before returning to the top flight under the Frasers banner this month.

Its success has been based on what has been described as a ‘pile them high, sell them cheap’ approach to retail, although Murray’s promotion as chief executive has signaled an effort to focus on a more expensive ‘elevation’ strategy.

Keep it in the family

Eyebrows went up when former club promoter Michael Murray was named as Sports Direct’s ‘head of elevation’ in 2019.

In May of this year, he became chief executive, succeeding majority shareholder Mike Ashley. Murray happened to be the partner of Ashley’s daughter Anna.

The couple, who met in Mallorca in 2011, married the same month as his promotion, in a lavish ceremony at Blenheim Palace.

Sports Direct chief Michael Murray married Mike Ashley’s daughter Anna . in 2011.

Murray is only 32 years old and has played a key role in the tycoon’s attempt to drag his shopping empire upmarket, with his high-end Flannels stores as the future.

The company announced last year that as its chief executive, it will receive a base salary of £1million and could earn a £100million bonus if he manages to raise its share price to £15 for 30 consecutive days in October 2025.

That’s about double their current value. Murray has already received more than £20 million in consultancy fees from Frasers before taking over, through his property company MM Prop.

Earlier this year, Murray, the son of a property developer from Doncaster, told the BBC that Ashley is ‘not pulling the strings’.

Ashley has aggressively battled rivals over the years.

“I’ll finish JJB first and then I’ll move on to JD,” he said in 2011. JJB went bankrupt in 2012, while JD Sports is making strong progress, but executive chairman Peter Cowgill was ousted earlier this year. Meanwhile, there have been a succession of acquisitions of struggling brands.

Most notable was the £90 million deal four years ago to buy House of Fraser, the department store that dates back to 1849 and now gives its name to Ashley’s umbrella retail group.

Evans Cycles, Sofa.com and Jack Wills are some of the others his company has gobbled up.

But a £180m bet on Debenhams went south when that department chain went bankrupt – nullifying Ashley’s bet and prompting him to take legal action.

Another legal entanglement – with an investment banker over an alleged business pact in a London pub – was more notable as it shed light on Ashley’s lifestyle.

The tycoon told the Supreme Court, “I like to get drunk. I’m a power drinker.’ The court also heard that he once hosted a management meeting when he drank 12 pints and vomited in a fireplace.

Elsewhere, the use of zero-hour contracts for Sports Direct’s warehouse workers has been criticized, and it has been alleged that it used Victorian workhouse conditions.

Fans of Newcastle United, the Premier League team that Ashley bought in 2007, have few kind words about the tycoon.

They soon turned against him and after lengthy attempts to sell the club, it was handed over to a Saudi Arabia-led consortium last year.

The business world may look friendlier on Ashley’s track record.

“He started this company out of thin air,” Hyman said.

He added: “While he may not have always played the game the way the city would like, he has delivered fantastic returns for the majority of investors.”

Russ Mold, investment director at AJ Bell, said Ashley’s departure was a “seismic moment.”