Mike Ashley launches scathing attack on Burnham’s ‘delusions’ to revive high street

Sports Direct tycoon Mike Ashley has launched a scathing attack on Andy Burnham’s ‘delusional’ plans to revive the high street and has warned that retailers will be ‘further devastated’ unless taxes are cut.

In a letter to the Prime Minister, the billionaire owner of Frasers Group and former owner of Newcastle United football club, Ashley lashed out at what he called “recent populist proposals”.

Burnham this week insisted he would take the pressure off companies, which have complained that consumers have less money to spend while their own operating costs have soared in recent years.

His plans include financing discounts on business rates for pubs and clubs by increasing business rates for online stores and stricter regulations on shoddy vape and gambling shops.

But Ashley – whose retail chain includes House of Fraser, Flannels, Sofa.comJack Wills and Evans Cycles – said it would be ‘simply delusional’ to tax larger retailers more by increasing rates further.

Ashley said there are “real” challenges facing the country’s economy that need to be addressed, rather than “topics that make good media sound bites.”

He criticized a “disastrous” approach to business rates and “the dramatically rising cost of employing people” as the biggest obstacles facing businesses.

These factors – including Keir Starmer’s government’s increases in minimum wages and employers’ National Insurance contributions – have backfired and led to retailers cutting jobs, he said.

In a plea prior to the Budget on October 28, Ashley said: ‘These aspects of the hostile business environment cannot be allowed to continue or the high street will be further devastated.’

Ashley mentioned his £40 million rescue of troubled department store chain Harvey Nichols earlier this month. He asked Burnham: “My challenge to you is: how are you going to help turn around Harvey Nichols?”

In addition, he said Britain’s shoplifting epidemic was “getting much worse” and called for action to help protect shops from theft.

Frasers loses around £40 million a year to theft, he said, while incidents of theft sometimes also put staff at risk.

Ashley also hit out at Burnham’s comments about retailers offering misleading recommended retail prices (RRPs) and fake discounts.

He said his Sports Direct brand often offers deep discounts while advertising ‘up to 90 per cent off recommended retail price’ to online shoppers. “Reducing prices through discounts is what helps consumers by giving them more value and helps in reducing the cost of living,” he said.

He said there is no inherent problem with suggested retail prices, which are set by reputable companies such as Nike, Adidas and Puma.

But he urged scrutiny of “price fixing” in the sportswear market, “where consumers will actually pay too much because retailers cannot give the discounts they want.” He said prices for official England shirts were ‘scarily uniform at £134.99 across the board’ during this summer’s World Cup.

This price was achieved through tactics that make the market “less competitive,” he added.

Ashley said the competition watchdog handed out fines that were “disproportionately low and toothless and therefore do not stop the behavior.”

He concluded: ‘This is just one example of many – and this should be the government’s focus in terms of consumer protection – looking at legal changes to prevent brands from restricting distribution to support price fixing.’