Sports World tycoon Ashley ponders £2.5bn flotation

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The Independent Online

Mike Ashley, the secretive retail tycoon, is considering the flotation of his Sports World International empire in a move that could value the company at £2.5bn.

Mr Ashley, 41, is believed to have hired the investment bank Merrill Lynch to advise him on a strategy for the sports retailer, which owns 300 shops, including Lillywhites in Piccadilly Circus, central London, and brands such as Dunlop Slazenger and Kangol.

A total or partial sale of the business is also thought to be an option.

Sports World registered profits close to £75m on sales of £900m in 2005. Mr Ashley owns 100 per cent of the group personally, and securing a £2.5bn price tag for it would make him Britain's 12th richest person, according to the Sunday Times Rich List. This year he was ranked in 54th place.

A former squash coach, Mr Ashley started the business after leaving school at 18. He began on the high street in the 1980s, opening sports and ski shops in and around London with private money.

In the 1990s he rebranded the chain Sports Soccer and grew it rapidly. Nevertheless, he was registered as a "sole trader" until as late as 2000, when the business was first incorporated. At the last count, the Hertfordshire-based retailer employed more than 8,000 staff nationwide, and the chain has recently expanded into Ireland, Belgium and Slovenia.

In 2002, Mr Ashley acquired Lillywhites and turned the upmarket store into a pile-it-high, sell-it-cheap outlet in line with the rest of his shops.

Mr Ashley's winning formula sees him lure shoppers via major discounts on top brands such as Adidas and Nike. Once inside his stores, customers also go on to buy brands that he owns, which have much higher profit margins. However, Adidas and Nike have indicated recently that they do not want their brands sold in what they see as downmarket surroundings.

Mr Ashley, who grew up in Burnham, Buckinghamshire, shocked some in the retail industry when he turned whistleblower in 2000 and reported his rivals to the Office of Fair Trading (OFT) for fixing prices of replica football shirts. This eventually led to a dawn raid on Umbro's headquarters in Cheshire and a search of JJB Sports' base in Wigan, and earned Mr Ashley a reputation for being a ruthless operator.

JJB Sports was fined £8.3m, one of the largest ever sanctions imposed by the OFT, and Umbro had to pay out £6.6m.

This autumn, Sports World took a near 30 per cent stake in the retailer Blacks, the owner of Millets and Mambo. This has led to suggestions that Mr Ashley may reverse Sports World into Blacks as a way of getting a stock market listing.

The tycoon never speaks to the press and has not been photographed for 20 years. When his Swedish-born wife, Linda, divorced him in 2003, after 14 years of marriage, he quietly agreed to one of the biggest settlements in British legal history, reportedly handing over £50m-worth of assets.

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