Frasers Group: keeping it in the family

“Few figures have ruffled the feathers of the City establishment” quite like Mike Ashley – the unpredictable “tracksuit and trainer tycoon” who founded Sports Direct and built the sprawling high street empire Frasers, said Ben Marlow in The Daily Telegraph. News of his exit has ruffled some more. The bombastic entrepreneur is quitting as CEO, in favour of the group’s “head of elevation” Michael Murray, 31, a relatively inexperienced consultant who doubles as Ashley’s prospective son-in-law. “Let’s hope he goes through with the marriage or there’ll be some awkward board meetings.”

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Shares in the group, in which Ashley has a controlling 64% stake, yo-yoed. Traders quickly wised up that this is “a transfer of power in name only”, observed Nils Pratley in The Guardian. Despite listing in 2007, Frasers is “a private company in spirit” and Ashley – who has always liked having “a sidekick to push into the spotlight” – is hanging on as “executive director”. There’s no doubt who remains “the real boss”. The main shock is that Murray, a former nightclub promoter, “has been pushed up the ladder so soon”. Perhaps he’ll prove “a talented executive and a breath of fresh air”, but he’s currently best known for the spectacular sums he’s scooped on Frasers’ property deals: £9.7m over 2019 and 2020.

Ashley has once again thumbed his nose at City conventions, said James Moore in The Independent. But Frasers has proved remarkably “resilient” of late (shares have trebled since the start of the pandemic). And in any case, “dynastic games” are not uncommon in public companies – think of the Murdochs. Still, planned changes to London’s listing rules, conferring even more power on founders, will probably result in more mavericks like Ashley. That’s the price of “surrendering” standards.