Although he will retain a seat on the board as an executive director – in charge of what, one wonders – the plan is for Michael Murray, currently the head of “elevation” at the retail group, to take over the chief executive (CEO) role on 1 May 2022.
That’s provided a reward and remuneration package can be successfully negotiated but seeing as Murray is engaged to the boss’s daughter, no one is expecting that to be a problem, even if it will be subject to shareholder approval; Ashley remains the group’s majority shareholder with 64% of the share capital.
Here’s my original story from 2016 on Michael Murray joining Mike Ashley’s empire which caused the company’s PR a fit as they hadn’t been told that the daughter’s boyf was only 26, a former nightclub promoter or was going to be quite so influential… https://t.co/KSWjmuS9p0
— Ashley Armstrong (@AArmstrong_says) August 5, 2021
Surrendering the CEO position might enable Ashley to move out of the spotlight but it is hard to tell whether he minds being the subject of so much attention, even if much of it is critical of his actions (or so my Newcastle United supporting friends tell me).
Britain’s answer to Elon Musk (or Kim Jong-un?)
He’s not quite Britain’s answer to Elon Musk but he shares some of the same characteristics in that he does not seem to much give a toss what other people think, he’s not overly fussed about conforming to stock market conventions and most crucially he has proved very adept at building a successful business.
Not bad for a man who left school at the age of 16.
Although he owns Newcastle United Football Club and is frequently pictured in the club’s colours (my old art teacher would say black & white aren’t colours), his roots are in the south of England.
He opened his first sports shop in Maidenhead in Berkshire in 1982 and expanded both in the regions and the nation’s capital.
The company floated on the London Stock Exchange in 2007 with a market capitalisation of GBP2.5bn – it’s now valued at GBP3.2bn having recovered from its share price more than halving in the immediate aftermath of the first UK lockdown last year.
Despite its stock market listing, the company has always seemed like Ashley’s personal fiefdom and he has not gone out of his way to make friends in London’s Square Mile.
The flotation made Ashley more widely known to stock market investors but his national profile was raised when he took over Newcastle United, one of England’s oldest and most fanatically followed clubs.
City and the Toon Army united in having doubts
If the boys in London’s Square Mile are not best pals of Ashley you should read what the Newcastle fans say about him.
Ashley is currently seeking to sell the club but it seems like that’s been the case for several years now and most Newcastle fans, who perhaps had been hoping when he took over that he would splash some of his cash generously on the club, can’t wait for him to leave.
Throughout his mercurial career as a retail magnate, he has backed his judgement and taken punts on business moves that seemed a bit iffy at the time.
Acquisitions of second-tier sports equipment brands such as Dunlop, Umbro and Slazenger, famed but fading London sport shop Lilywhites and more recently Evans Cycles, Game and House of Fraser have all had pundits at times questioning their commercial merit.
The House of Fraser acquisition was deemed significant enough to warrant a name change from Sports Direct International to Frasers, although among his first acts as the new owner of the renowned chain of department stores was to close several branches and threaten to close more unless the government changed its stance on business rates.
The company was still banging on about business rates in today’s full-year results announcement, with company chairman David Daly, hinting the company would like to buy up parts of the collapsed retail chain Debenhams but is disinclined to do so unless there is a change in the government’s business rates policy.
To be fair, he – and Ashley – have a point; the retail landscape has changed massively in the last 20 years, resulting in online retailers having a massive advantage they clearly no longer need to compete against established bricks & mortar operators.
Would you leave your job with Amazon to work for Sports Direct?
Whether the patently uneven playing field justifies the retailer allegedly treating its employees as harshly as any global online retail titan (not mentioning any names) is not even a moot point, although the company (like the aforementioned global online retail titan) has defended its employment practices.
However, even Ashley has been known to break the “never apologise, never explain” rule by which he seems to run his business.
When the COVID-19 epidemic first hit the UK Ashley wanted his stores to be considered an essential business – as if Britain could not function without access to polyester tracksuit bottoms – and thus remain open.
Ashley subsequently published an open letter apologising for what he said was an ill-judged response to the pandemic.
So, he can change his mind and it would not be a total surprise if he did so in relation to his decision to hand over the reins of Frasers Group.