Mike Ashley, the sports-loving, big-drinking billionaire behind the U.K.’s Frasers Group retail empire, has announced plans to step aside and pass leadership to one Michael Murray, currently the group’s “head of elevation” who is also reportedly engaged to Ashley’s daughter, Anna.
The company said in a statement Thursday that Ashley, who is 57 years old, will walk away as CEO of the $4.3 billion (market cap) empire—which he founded in 1982—on May 1 next year.
Incoming CEO Murray, who is not on the board and remains a new name for shareholders, will take control of a U.K.-based retail group that includes bargain superstore Sports Direct, department store House of Fraser, Evans Cycles, designer retailer Flannels and Game, the U.K.’s equivalent of GameStop.
The statement added that Murray, age 31, would lead the group forward “on this increasingly successful elevation journey.”
Retail consultant Nick Budd tells Forbes that the appointment might raise eyebrows, but isn’t quite as nepotistic as it first might seem, adding that Murray “has effectively been running the show for a while,” albeit away from the board. Budd says, “Despite his lack of experience, he seems like a sensible guy.”
Ashley, who built his empire during an era in the 2000s when cheap, cheerful and chaotic stores were the norm, has reportedly been in search of a successor for a while now. In 2019 Ashey told analysts on an earnings call, according to the Daily Telegraph, that “the new generation don’t want the old Sports Direct,” preferring instead a better presented shopping experience with more clothes picked up and bought from rails, and not the floor.
Retail consultant Bubb says the days of Ashley’s “discount bazaars” are coming to an end. He credits Murray for his better-looking “elevated” stores and says that at Sports Direct giant brands like Nike and Adidas did not like the chain’s bargain bucket style and needed convincing that the business “really has changed,” thanks to Murray’s so-called “elevation” process. Going forward, Murray—not Ashley—is likely the best placed to forces these changes, Bubb adds.
Michael Ashley is worth an estimated $3.2 billion. The Frasers Group share price remained largely unmoved by Thursday’s news, down just 0.08%.
Ashley Walks Away?
The announcement appears to mark a move away from the limelight for a billionaire who is constantly making headlines in the U.K. for many right, wrong and occasionally hilarious reasons.
Ashley founded Sports Direct in 1982 when he was 18 , and today owns over 60% of the group that has grown to some 769 stores across 25 countries. During that time he has hoovered up dozens of companies, including boxing glove maker Everlast, Wimbledon supplier Lillywhites and department store House of Fraser. He took the company public in 2007, personally pocketing $1.8 billion (pre-tax) from the IPO. That same year, he bought Premier League football club Newcastle United for $190 million; his stake is now worth nearly $360 million. Forbes first listed Ashley as a billionaire, worth an estimated $2 billion, in 2007, prior to the Sport Direct stock listing.
However, like his one-time friend Sir Philip Green, Ashley has been a never ending source of headlines in the U.K. The billionaire was once accused in the London High Court of some unusual business practices, including challenging a City of London stock analyst to a drinking game—and winning. Having consumed a dozen pints followed by vodka chasers, the court heard that, “Mr Ashley then vomited into the fireplace located in the centre of the bar, to huge applause from his senior management team.”
As scrutiny over the pay and conditions provided to staff at his warehouses mounted in 2016, Ashley pulled out a “massive wad” according to Sky News, of £50 notes while going through security during a press day and media tour for a Sports Direct warehouse. The incident arrived during a headline-heavy year for Ashley, during which the tycoon was pulled in front of U.K. politicians to explain why staff at some of his warehouses were paid below the minimum wage. Ashley told MPs that regarding the working conditions at his warehouses: “I can accept the criticism…some of the things that you’ve said to me today would actually lead me to believe that [the business has] definitely outgrown me.”
According to the Guardian, Murray is a former nightclub promoter who met Ashley’s daughter Anna while on holiday in 2011. Between 2019 and 2020 Murray was paid a reported $13 million by Frasers Group as a consultant, working with Ashley to improve the customer retail experience and building deeper trust with their leading brands.