Mike Ashley: building the Harrods of the high street

Mike Ashley, the billionaire bruiser who founded Sports Direct, is gradually taking his brand upmarket. His track record suggests we shouldn’t dismiss his chances of reviving House of Fraser. Jane Lewis reports.

Mike Ashley: trying to become respectable

© 2016 Bloomberg Finance LP

"My ambition is to transform House of Fraser into the Harrods of the high street," said Sports Direct boss Mike Ashley as he added the stricken department store to his retail empire last week. Tell that to the 169-year-old chain's conservative customers, says Melanie Reid in The Times.

"Given the ghastliness of Mike Ashley", it was a shock to see Jenners the elegant grande dame of Edinburgh "fall into the hands of the Sports Direct philistines". It's rather like seeing "a high-born old lady fall upon penury and face eviction".

Elevating the brand

The rushed rescue of the once prestigious store group certainly feels like "an inadequate way" to resolve its future, says Nils Pratley in The Guardian. "Into administration by breakfast time, into the tender embrace of Ashley by mid-morning." Nonetheless, while heavy job losses still look inevitable, at least prospects for the group seem brighter under the Sports Direct boss than under House of Fraser's former Chinese owner, Nanjing Cenbest.

Advertisement - Article continues below

Ashley, 53, is "obsessed with department stores". He has clung onto his 30% stake in troubled Debenhams and has been gunning to take full control of House of Fraser for years. He may now merge the two. What's more, he is "on a mission to rid himself of a reputation for being a one-trick retailer who can only run cheap n' cheerful shops".

Advertisement - Article continues below

His new "Harrods" line echoes his "Selfridges of sport" ambition for Sports Direct the common theme is "elevation" of the brand. "Mike has secretly been trying to become respectable for years," an acquaintance told The Observer. Although he made his fortune selling discounted tracksuits and trainers from stores rammed with stock, he wants to shed his "Mr Tracksuits" reputation. Recent acquisitions of "more upmarket brands" include the designer fashion chain Flannels and lingerie brand Agent Provocateur.

Renowned for being "secretive and publicity-shy", Ashley has certainly come a long way since his early days as a squash coach, says The Times. Born in Walsall and raised in Buckinghamshire, he left school at 16 and got his first retail experience in the shop of a Maidenhead squash club.

Advertisement - Article continues below

He was still a teenager when, in 1982, he opened his first shop with a £10,000 loan from his parents. Ashley expanded quickly by acquisition, hard work and aggression, says The Daily Telegraph. "He was reputed to block suppliers' cars in the car park until sales were agreed on his terms."

A top British entrepreneur

The acquisition of brands such as Lonsdale and Slazenger helped secure Sports Direct's flotation in 2007, beginning a rocky relationship with the City. Ashley once dubbed his own shareholders "cry babies". And while the collapse of rivals such as JJB, following a sometimes dirty turf war, "further smoothed his path", he has never been far from controversy. The "Victorian" working conditions at Sports Direct's Shirebrook warehouse were the subject of a "scathing parliamentary inquiry".

"Not all Ashley's punts have paid off," says Management Today: his foray into football with Newcastle United has been "a costly distraction", but it would be unwise to write off his chances of success with House of Fraser. "Love him or hate him", Ashley, worth £2.4bn, is one of Britain's most successful entrepreneurs for a reason. When it comes to the high street, "he rather knows what he is doing".




Beyond the Brexit talk, the British economy isn’t doing too badly

The political Brexit pantomime aside, Britain is in pretty good shape. With near-record employment, strong wage growth and modest inflation, there is …
17 Oct 2019
UK Economy

Post-Covid life will look remarkably similar to pre-Covid life

Everybody is speculating on how life will look once lockdown is lifted. My guess, says Merryn Somerset Webb, is much the same as it looked before the …
29 May 2020
Buy to let

The death of buy-to-let property is a useful cautionary tale for all investors

Investing in buy-to-let property was once a perfectly valid thing to do. But the government killed the market. John Stepek explains what investors sho…
29 May 2020
UK stockmarkets

UK banks and negative interest: money for less than nothing

The upheaval at HSBC has underscored banks’ poor prospects. Negative interest rates won’t make things any easier. Matthew Partridge reports
28 May 2020

Most Popular

EU Economy

Here’s why investors should care about the EU’s plan to tackle Covid-19

The EU's €750bn rescue package makes a break-up of the eurozone much less likely. John Stepek explains why the scheme is such a big deal, and what it …
28 May 2020

As full lockdown ends, what are the risks for investors?

In the UK and elsewhere, people are gradually being let off the leash as the lockdown begins to end. John Stepek looks at what risks remain for invest…
29 May 2020

In support of active fund management

We’re fans of passive investing here at MoneyWeek. But active fund management has its place too, says Merryn Somerset Webb.
25 May 2020