At Christmas, Mike Ashley puts up so many lights on the house he owns in the north London billionaire’s strip of Totteridge Lane that you could possibly see it from outer space. Not to mention the fact that it’s got 33 rooms and would set you back about £20m if you fancied buying it.
Some neighbours say that this seasonal display is a tad garish, but, for a man who counts his wealth in the billions (£2.3bn, by the most recent measure), he can afford not to let that faze him. In fact, the owner of the giant Sports Direct chain, who this week announced that thousands of his staff would each be receiving shares worth more than £75,000 as part of their performance bonus, has learned to have a very thick skin. That’s a good job, given the contempt with which he is held by the legions of Geordies who detest what he has done to Newcastle United Football Club since buying it in 2007. They say he’s starved the club of decent investment, decent managers and, worst of all, decent class.
None of the criticisms is entirely without merit, although he would never admit it. What he might do, though, if you get enough beers in him, is regale you with some of the less polite chants about him from the terraces of St James’s Park. Says a colleague: “The one I’ve heard him sing goes something like “Give us back our club you cockney c***”.
While his famous beer gut – captured in the tabloids on numerous boozy occasions – may give the impression of a good-time guy partying his money away, the truth is very different. In the industry, Ashley is known as being one of the most focused, relentlessly hard-working and intelligent retailers in the country. Colleagues say it is that focus, plus a large dash of ruthlessness, that has made him destroy or gobble up his competitors one by one.
Think about it. When you need a tennis racket, a tracksuit or a football for the kids, what options do you have in your nearest town? Probably none. Because over a period of two decades, Ashley has built up arguably the most powerful monopoly on the high street.
It was chance that got him his first break. Despite that belly we see now (which has shrunk in recent months), he started out as a youngster with a promising career as a professional squash player ahead of him. He started helping his Maidenhead club in its sports shop, when injury killed off the prospect of making a living from the sport. So, just 16, the grammar school boy left school and took over the running of the shop. He went on to open a Sport and Ski store in the town, then opening more across London through the 1980s and 1990s, changing the name to Sports Soccer and tapping several wealthy backers for finance.
This rapid growth soon came to the attention of the northern sports retailers. One in particular, Wigan chairman and founder of JJB Sports Dave Whelan, reputedly warned Ashley off his turf. “There’s a club in the north, son, and you’re not part of it,” he is understood to have said. This was like a red rag to the ambitious southerner. And Whelan had made a major misjudgement. He was talking at a meeting held with another sports chain to fix artificially the price of replica football shirts. Ashley, surely motivated by Whelan’s implicit threat, turned whistleblower, setting in train a series of investigations into the industry and an £8m fine for JJB. Whelan has detested him ever since.
“Mike’s ruthlessness is just unbelievable,” says one rival. “He set out to destroy his rivals in the 1990s and 2000s, and now look at them. They’re all but finished. The competition is destroyed. There’s no question: if you get on the wrong side of him, he’s not a very nice man.”
David Jones, the former Next boss, saw his reputation battered when he became chairman of JJB after Ashley revealed that he had lent his former friend £1.5m. Ashley revealed the loan when it suited him to stir up trouble for the rival chain. Others, too, have fallen by the wayside.
As well as driving out rival retailers, Ashley’s secret has been to buy up the sports brands which, until he came along, held enormous power over the market. The likes of Nike and Adidas have proved too big to beat, but he has built up a locker room full of second-division names – Slazenger, Dunlop, Everlast – buying them and shifting manufacturing to cheaper destinations. His trophies in London include the Lillywhites store in Piccadilly Circus and, recently, Oxford Street’s original HMV.
Nowadays, every Monday, he helicopters up to Sports Direct’s headquarters in Shirebrook, Nottinghamshire. He and chief executive Dave Forsey, who has been with him since he opened his first shop in Maidenhead, have bought houses nearby where they stay during the week before he flies back to London at the weekends. Every Monday night the top brass go to dinner in a local restaurant to thrash out the issues of the day. They talk late into the night. “It’s hard work, not hard drinking,” says one.
His staff say he is immensely collegiate and engenders huge loyalty. Hence Sports Direct has, as evidenced this week, the most generous employee shares bonus scheme on the stock market. Since its launch, employee turnover has halved to 15 per cent – low by retail standards.
Forsey may be his longest serving lieutenant, but there are many more who have been with the business well over a decade. It’s no coincidence that, when he was photographed in the tabloids stripping down to his boxers with friends at a boozy karaoke party recently, the occasion was a celebration in a local Chinese restaurant of a Sports Direct manager’s birthday. Ashley had hired the whole place. As one partygoer told The Sun: “Mike gets stick from some people but he’s a brilliant boss.”
The stores are designed to look piled high, cheap and chaotic. But this, says one former senior exec, is just a marketing ruse. The vast warehouses in Shirebrook – one for retail and one for online sales – are as hi-tech and spotlessly tidy as those of Ocado or Tesco.
Ashley’s business acumen was not always so reliable. After he floated the business in 2007, the company had an appalling start to life on the stock market. Ashley hated the meetings with City analysts and investors. He was perceived as being grumpy and non-communicative: prone, as one analyst recalls, to refusing to answer questions, instead ranting about his own choice of topics. The shares, which floated at 300p, crashed as low as 30p amid profit warnings and concerns about how the business was being run. As one friend says: “I’ll be honest. He went a bit mad in that public company arena. He got badly beaten up by the City, badly beaten up in the share price. Nobody outside the company understood him and, frankly, he went a bit crazy.”
That craziness, this friend says, led to Ashley betting, and losing, millions of pounds, maybe hundreds of millions, on other activities, such as day-trading on the stock market and spread betting on anything that caught his attention. “You never read about it, but he lost a large part of his fortune,” says the friend. And that took some doing, considering his pile included the near £1 bn he cashed out of Sports Direct when he floated it. Sometimes, his bets leaked into the press, such as when he lost £1m on the tables at Aspers casino in Newcastle.
Gambling has always been a hobby. He famously resolved a £200,000 legal bill with his City brokers with a game of Spoof. But unlike his short and long bets on the financial markets, buying Newcastle United in that year was not supposed to be risky. The story goes that Ashley snapped up the club from the Hall family with a view to selling it quickly at a huge profit to an already identified buyer – a deal known as a “flip” in City speak. “But the deal never came off,” laughs one familiar with the negotiations. “And what do you call a deal that goes wrong? An investment. Newcastle’s become a very costly investment for Mike.” Not that Ashley will sell out on the cheap to avoid the abuse and grief he gets from the Magpies’ faithful. “He will never sell that club at a loss. It’s just not in his make-up,” says the friend.
Ashley seems more cautious these days. He was recently overheard telling Bhs and Topshop tycoon Sir Philip Green, whom he calls Emp – short for emperor: “I don’t do risk any more, Emp.” While Green and Ashley are friends (Green apparently returns the compliment by calling Ashley “Little Emp”), the Barbados and Monaco lifestyle of the Greens and their celebrity friends is not Ashley’s style. You’re more likely to find him in the pub with his old drinking buddies from Maidenhead. And he’s deeply attached to his family, having recently got back together with his wife Linda eight years after their divorce. He and Linda reunited despite her having a son with a new partner, the businessman Simon Brodin, in the interim. Ashley said during the split: “I can afford many things but getting married isn’t one of them.” Divorcing the former Sports Direct shop girl cost him £50m and left him “heartbroken”, his spokesman says.
Now he has barely any competition and a family back intact, he seems a more content character, a colleague says. A neighbour recalls spotting him at the local primary school fete with his family last month. “He won a dusty bottle of booze in the tombola and strolled around clutching it all afternoon – hardly billionaire behaviour.” But then Ashley is no ordinary billionaire.
A Life In Brief
Born: Michael James Wallace “Mike” Ashley, 1964, Burnham, Buckinghamshire.
Family: He and his wife Linda Ashley divorced in 2003 but reunited recently.
Education: Burnham Grammar School.
Career: County level squash player, then coach. Became a billionaire retail entrepreneur in the sporting goods market, buying Donnay, Karrimore, Kangol and Lonsdale. Opened his first Sport and Ski shop in the 1980s in Maidenhead, later rebranded Sports Soccer. In 1982 he founded Sports Direct. Became owner of Newcastle United in 2007.
He says: “I know what it means to love football and to love a club. It was the passion that I felt for sport that helped me to be successful with my business.”
They say: “I know for a fact he can tell you the price of something on his shelves to the penny. That’s how thorough he is.” Alan Pardew, Newcastle United manager