Mike Ashley to step down as Frasers boss as profits tumble

1 Comment

Retail tycoon Mike Ashley has confirmed his intention to pass the mantle of chief executive to Michael Murray in the next financial year.

Murray, who is engaged to Ashley’s daughter Anna, is expected to take the helm of Frasers Group from May 1, 2022, leaving his current role as head of elevation.

Ashley is set to step down from the chief executive role at the same time, but would remain on the board as executive director.

The retailer said it believed Murray would be well positioned to lead the group on its “increasingly successful elevation journey”.

Frasers Group said in a statement: “The group’s elevation strategy is transforming the business and receiving positive feedback from consumers and our brand partners, especially on projects such as the new Oxford Street Sports Direct, which opened in June 2021.”

The news comes as Frasers Group reports a drop in underlying profit before tax for the full year to April 25, down 95.1% to £5.8m.

Frasers recorded revenues down 8.4% overall for the same period, to £3.63bn, hampered by falling revenues in both UK sports retail and European retail divisions, largely due to enforced store closures.

The retailer noted a slight uptick in its premium lifestyle business, however – up 1.9% to £735m as it improved its online offer and flagship store openings of the Flannels fascia.

Frasers said it is now looking to continue its Elevation No Limits strategy, focusing on store investments and warehouse capabilities.

The retailer also said it is planning to take over a number of ex-Debenhams stores in the near future, but called for clarity from the government on business rates to ensure the “viability of these investments and the jobs that could be created”.

Frasers non-executive chair David Daly said in the statement: “The Covid-19 pandemic continues to be a significant challenge for the country, the retail industry and for Frasers Group.

“Our stores were closed again in November 2020, followed by a significant closure in the week before Christmas, which then led to the third lockdown in January 2021.

“These lockdowns resulted in virtually all of our UK stores being closed for approximately six months in FY21. Our European stores were also impacted by closures, although the impact was not as punitive as it was for the UK business.

“We appreciate the government support with the furlough scheme and business rates relief. We are predominantly a bricks-and-mortar business and this support has enabled us to keep stores open that otherwise might have been closed, particularly loss-making House of Fraser stores, saving many jobs.

“We must caution, however, that the return to pre Covid-19 business rates will present a threat to a number of these stores. 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.”