Frasers Group, the owner of Sports Direct, EMS and Bob’s Stores in the U.S., said Mike Ashley would step down as CEO next year. He will be succeeded by Michael Murray, who is head of elevation at Fraser Group.
The company also owns the House of Fraser department stores and the designer fashion chain Flannels.
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 board considers it appropriate that Michael leads us forward on this increasingly successful elevation journey.”
Ashley, who founded Sports Direct as a single store in 1982 and grew its network to 1,000 doors, would be returning to the same chairman position he held until 2016 before taking over from long-serving CEO Dave Forsey. The report indicated Ashely planned to resign “over the course of FY22.”
The potential change in leadership came as sales at Frasers Group slid 8.4 percent and pre-tax profits fell 94 percent to £8.5m in the last fiscal year ended April 25 as the company wrote down the value of stores and investment properties by £85 million amid the shift towards online shopping during the pandemic.
The fall in profits came despite the retailer claiming £80 million in furlough assistance and £97.5 million in business rates relief globally.
Sales at the group’s UK sports division, which includes the core Sports Direct chain and Evans, decreased 10.7 percent to £1,968.5 million. Excluding acquisitions, sales were down about 15 percent. The division was forced to close most of its stores during several high street lockdowns; however, underlying profits rose nearly 23 percent to £279 million.
Sales at the premium lifestyle division, which includes Flannels and House of Fraser, rose 1.9 percent as more Flannels outlets opened and online sales increased. Underlying profits for the division rose to almost £54 million from £4.5 million.
Rest of World Retail, which includes Bob’s Stores and Eastern Mountain Sports, achieved sales of £152.7 million against £174.2 million a year ago, a decline of 12.3 percent. Underlying EBITDA was £25.6 million, up from a loss of £6.8 million in FY20. The segment includes 22 Bob’s stores against 24 at the same time a year ago. It had 21 EMS stores against 20 a year ago. The segment also includes 33 stores in Malaysia.
European Retail decreased by 11.8 percent while revenue in its Wholesale & Licensing division decreased by 4.3 percent.
The company said it could not give guidance on sales and profits for the year ahead because of “future uncertainty” about the progress of the pandemic and the “high risk” of further high street lockdowns.
Ashley wrote in the report, “The board of Frasers Group has continued to consider the probable return of restrictions during FY22, including within its accounting judgments and estimates for FY21. As the effects of the COVID-19 pandemic continue to cause future uncertainty, including the Delta variant surge we are currently seeing, the board of Frasers Group considers it cannot currently confirm with enough material accuracy what the outcome for FY22 will look like.”
Photo courtesy Sports Direct
