What if Sport's Direct's Mike Ashley can turn around the high street when no one else is trying?

Ashley is swimming against the tide with his investments in retailers like House of Fraser, which took a big bite out of the otherwise decent results turned in by the core Sports Direct business 

James Moore
Chief Business Commentator
Thursday 13 December 2018 11:24
Comments
Setting an example for corporate Britain? Mike Ashley's Sports Direct has appionted an employee director
Setting an example for corporate Britain? Mike Ashley's Sports Direct has appionted an employee director

If Mike Ashley can turn around House of Fraser (Hof) we’ll probably have to accept that he’s some sort genius.

That will be an extremely tough pill to swallow given the way the mercurial Sports Direct boss carries on.

The latest Sports Direct results show what a tough pill HoF has been for him to swallow. Underling EBITDA at Sports Direct Group - that’s earnings before interest, tax, depreciation and amortisation (feel free to pause for breath after reading that out loud) - cantered in at £180.3m, up 15.5 per cent.

But that figure excludes House of Fraser. When the department store chain is included the number falls to £148.8. HoF knocked nearly £32m off the top.

The, um, ‘Harrods of the High Street’, as Ashley has sought to brand his new toy, is proving every bit as pricey as the famous Knightsbridge department store to its new owner.

Other Ashley bets, notably Debenhams, caused more pain in the form write downs totalling nearly £77m. He also has substantial stakes in Findel, French Connection, Game Digital, Goals Soccer Centres and the Iconix Brand Group. And he bought Evans Cycles from its administrators too.

All this at a time when the core Sports Direct business has held up remarkably well. Yes UK sales fell a little bit (0.2 per cent), but given the current retail climate that counts as a pretty good result.

It often seems as if Ashley enjoys the practice of putting a pistol to his feet and emptying the clip into them. Yet there is a counter argument.

Despite the money lavished on top business executives, they’re as inclined to groupthink as anyone else. The current consensus holds that department stores are doomed, the high street needs radical surgery, and there will be more retailers beating a path to administrators' doors over the coming year. Ashley has repeatedly pushed back against that. HoF would be gone were it not for him. So would Evans, and others.

He’s not above loudly calling for help (see his recent sparring with MPs). But he probably knows he’s not going to get it.

Yet he’s still ploughing on at a time when no one else seems to want to.

It’s incredibly difficult to see him pulling it off.

But if he does, he might even turn around his image from Mike Ashley, the unacceptable face of capitalism, to Mike Ashley, high street superhero. The Spiderman of sport?

Despite the fact that he behaves terribly at times, he does have a remarkable talent for business. The success of Sports Direct speaks to that.

If he does pull it of they’ll probably have to give him a knighthood or something. Imagine having to say ‘Sir Mike Ashley’. It’s enough to make you shudder.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in