There was an air of inevitability to Tuesday’s news that Mike Ashley was stepping down as director of Frasers Group, the retail conglomerate that has its origins in Sports Direct, building a business out of a single sports factory in Maidenhead 40 years ago.

For the Frasers – It changed its name from Sports Direct in less than three years – there is a gradual metamorphoseon in what can be called a “normal” society, and this is another step aimed at it.

Chief executive Mark Ashley has left the role Michael Murray, his son-in-law, in May of this year, although it appeared that he had enough time with the guards, he is already running the business today.

Frarsers announced a year ago that Mr Murray would accept the role.

Mr Ashley is now clearly stepping down from the board, with effect from October 19, and confirms that the relationship with the business will be based on an even more arms-length basis.

The tycoon said in a stock exchange statement: “Since Michael Murray took over the leadership of Frasers Group this year, the business has gone from strength to strength. It is clear that the group has the right leadership and strategy in place and I am confident that he will pass the baton on to Michael and his team.”

“Although I will be stepping down from the board, I remain 100% committed to supporting Frasers and Michael’s plans and ambitions, and I look forward to helping the team when they need me. My commitment and support is as strong as a Frasers partner as ever.”

Mr Murray added: “Mike has built an incredible business over 40 years and, on behalf of the board and the team, I want to thank him for everything he has done.

“With our new strategic team and leadership, we are moving forward with this business, and we are all excited for the future. We are grateful to have Mike’s support and expertise available to us as we continue the next phase of the Frasers group’s journey.”

The company said Mr Ashley, who will remain available to advise the board when called upon, will provide it with £100m of additional funding on the same terms as the £930m loan facility with its banks that was announced last December.

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Michael Murray. Pic: Frasers Group

As Ashley’s successor won the city in disbelief

Mr Ashley’s departure from the board will be greeted with skepticism in some quarters.

After all, with a 69.1% stake in Frasers, he remains its controlling shareholder.

In addition, with Mr Murray marrying his eldest daughter Anne, it may be that Mr Ashley may seek to move the company or exercise control through the back door.

That, although it was an insult to Mr Murray who, when appointed head of the property division at the time of Sports Direct at the end of 2015, gradually won over the skeptical City initially.

Overseeing the group’s 250m property portfolio, his role quickly evolved into what the company referred to as an “elevated strategy” that was intertwined with upgrading forces. This was a tacit acknowledgment that the Sports Direct outlet, once infamous for its kind of sales jubilation, needed more investment to sharpen itself.

It also saw stores relocated from what were in many cases small and tired old high street locations to modern, larger premises – a key move to encourage bigger retailers such as Adidas and Nike, with whom Mr Ashley had sometimes clashed. relationship, so that more of their stock is available.

At the same time, there was an open attempt to capture the market, encapsulated in the support of the house retailer Fraser chain, the designer shape chain Flannels and the preppy clothing brand Jack Wills.

All were described by the group as part of the “premium lifestyle” division which, in the pandemic-hit year to April 2021, was the only part of the Frasers Group to increase its sales.

The upmarket momentum is paying off: in July the company reported an operating profit of £344.7m – a record for the year to 24 April, compared with a loss of £60.3m over the previous 12 months.

Premium lifestyle continued to be the fastest growing segment of the business, with sales up 43%, compared to 31.2% sales growth in the UK sports retail segment, although this remains the largest single segment of the group.

However, even this has a more aspirational feel than was once the case: brand ambassadors for Sports Direct include Manchester City and England footballer Jack Grealish and budding tennis superstar Emma Raducanu.

Pic: AP
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Sports Direct counts Emma Raducanu and Jack Grealish as brand ambassadors. Pics: AP
Manchester City's Jack Grealish, centre, and Ilkay Gundogan in the semi-final against Real Madrid in the Champions League.  Pic: App

Hallmark of Ashley will reign as a thing of the past

A well-known developer. Shares in Frasers Group, which were modest on Tuesday, have risen 17% over the previous 12 months – a rally that recently saw the company return to the FTSE 100 after a six-year absence and confirmed Mr Murray as its youngest chief executive. in the Index.

Other gradual changes have also highlighted the evolution of the business. Concerns about the dubious practices of the group, which Mr Ashley has been involved with for years, have gradually melted away.

That is not to say Frasers Group has all its shareholders on board. A significant minority of them voted against the company’s pay plan at the company’s annual meeting, in September last year, with the shareholder’s plan that Mr Murray would get 100m pounds (if all his targets were achieved) attracting particular ire.

In terms of the business itself, some industry watchers are concerned that Frasers’ e-commerce strategy is not as developed as that of some of its competitors, while others argue that Mr Murray has placed his biggest bet on shops returning to physical; than online, buying clothes.

Longer term, if Frasers should be seen by the wider community to invest in the normal community, regular acquisitions of other businesses or minority stakes, which was such a concept Mr Ashley – Frasers recently took a stake in the German fashion brand Hugo Boss. and is now looking to buy a MySale online seller mode – future events are also coming.

One thing Mr Murray can’t do about, though, are the accusations of nepotism that have been heard since he first joined the business and which linger to this day.

But it is worth remembering that such accusations were also hurled at Simon Wolfson twenty years ago, when, at the age of only 29, he became the executive director of Next, where his father had previously been chairman – and a little later the youngest chief executive of the company Footsie. .

It also turned out to be one of the UK’s best sellers of the last two decades.

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