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End of an era as Sports Direct founder Mike Ashley quits

Mike Ashley (pictured) has revealed he will step down next month as head of Frasers Group, the sprawling retail empire he launched with a single store four decades ago

Power drinker, football club owner, takeover specialist: the shutters close on the “maverick” career of one of the High Street’s most colorful personalities.

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

Ashley still owns 69% of Frasers. And his son-in-law Michael Murray is the managing director.

Mike Ashley (pictured) has revealed he will step down next month as head of Frasers Group, the sprawling retail empire he launched with a single store four decades ago

Mike Ashley (pictured) has revealed he will step down next month as head of Frasers Group, the sprawling retail empire he launched with a single store four decades ago

Still, the announcement that he will not seek re-election to the board at this month’s annual general meeting has been seen as ‘earthquake’.

The city hasn’t always been kind to Ashley, who took her sportswear business into the FTSE 100 nine years ago.

But shares fell on news of his departure – down 1.2%, or 9p, to 777p. “I’m very confident to hand over to Michael and his team,” said Ashley, who will remain available to the board as an advisor. “I look forward to helping the team. My commitment and support as a shareholder of Frasers is stronger than ever.

This commitment was demonstrated by Ashley’s £100m loan to the company.

It remains to be seen how important his removal really is.

Murray has officially been the general manager since May.

Yet the company’s moves since then – taking over fashion website Missguided and attempts to buy Australian site MySale and, it seems, high-end tailor Gieves & Hawkes – have looked like classic Ashley .

For the past few years, when Ashley served as executive vice president, few doubted that he was really in charge.

This time around, 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 shift in a way that previous announcements didn’t entirely do,” Hyman said. Still, for the bigger decisions, Ashley “would definitely be involved because he’s still the majority-dominant shareholder,” he added.

“His son-in-law would be crazy not to ask for advice – and Ashley is not the kind of guy who totally gives up driving,” Hyman said.

Ashley started the business in Maidenhead in 1982 and after a rapid expansion to over 400 stores, it went public as Sports Direct with a valuation of over £2billion in 2007.

The company first joined the FTSE 100 index in 2013, then fell into the FTSE 250 after a drop in value before returning to the top spot this month under the Frasers banner.

Its success has been built on what has been described as a “pile ’em, sell ’em low” approach to retail, although Murray’s promotion to general manager signaled an attempt to focus on a high end “rise” strategy.

keep it in the family

Eyebrows were raised when the club’s former promoter Michael Murray was named Sports Direct’s ‘elevation chief’ in 2019.

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

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

Sports Direct chief executive Michael Murray married Mike Ashley's daughter Anna in 2011

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

At just 32, Murray has played a key role in the tycoon’s bid to upscale his retail empire, with his high-end Flannels stores seen as the future.

The company revealed last year that he would receive a base salary of £1m as chief executive and could earn a bonus of £100m if he managed to take its share price to £15 – for 30 consecutive days – by October 2025.

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

Earlier this year Murray, the son of a Doncaster property developer, told the BBC that Ashley was “not pulling the strings”.

Ashley has aggressively taken on her rivals over the years.

“I’m going to finish JJB first, then I’ll move on to JD,” he said in 2011. JJB went bankrupt in 2012 as JD Sports goes from strength to strength – but its executive chairman Peter Cowgill was ousted earlier this year. In the meantime, takeovers of troubled brands have followed one another.

Most notable was the £90million 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 global retail group.

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

But a £180m bet on Debenhams went south when that chain of departments went bust – wiping out Ashley’s stake and prompting her to take legal action.

Another legal entanglement – with an investment banker over an alleged business pact at a London pub – was more notable for shedding light on Ashley’s lifestyle.

The tycoon told the High Court: ‘I like to get drunk. I am a power drinker. The court also heard he once held a management meeting when he drank 12 pints and vomited into a fireplace.

Elsewhere there have been criticisms of Sports Direct’s use of zero-hours contracts for warehouse workers and claims it operated in Victorian workshop conditions.

Fans of Newcastle United, the Premier League side Ashley bought in 2007, have few kind words to say about the tycoon.

They quickly turned on him and after lengthy attempts to sell the club he was transferred to a Saudi-led consortium last year.

The business world may seem kinder to Ashley’s record.

“He built this business out of nothing,” Hyman said.

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

Russ Mould, chief investment officer at AJ Bell, said Ashley’s departure was a “seismic moment”.

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