Sports Direct founder Mike Ashley this morning said ‘you’re fired’ to the board and senior management of House of Fraser (HoF), the department store chain he bought out of administration for £90m.
The move seems apposite with a new series of The Apprentice due to air on the BBC (yes the monster is still with us). Perhaps Mr Ashley is of a mind to replace Lord Sugar?
Thing is, this is a bit more serious than the grumpy one booting some publicity seeking rube after his cash for some venture or another.
It’s not that the HoF bosses don’t deserve their fates, given the state of the retailer when it went down. But axing them so suddenly means that there is no continuity, making this a real issue for those doing business, or trying to do business, with House of Fraser. Who are they now supposed to contact?
Retail analyst Nick Bubb highlighted the case of ScS, a Sunderland based furniture chain that’s doing remarkably well given the tough climate it operates in.
A black spot in its latest results, however, was the performance of its House of Fraser concessions. “We are working with the new owners to address this as a priority,” it declared.
You get the feeling that its troubles may just have started.
Sports Direct gave no details on exactly who has gone from HoF, although Alex Williamson, the CEO of just over a year’s standing, is reported to have cleared his desk.
There were similarly no details on who exactly will be taking on the fired managers' responsibilities.
Maybe Mr Ashely will pick up the reigns. Maybe the job will be handed to Michael Murray, the former night club impresario who’s engaged to Mr Ashley’s daughter Anna.
Mr Murray currently bears the grandiose title of ‘head of elevation’ at Sports Direct. He’s been looking after the firm’s sprawling property portfolio as a consultant. The job of House of Fraser CEO would make one heck of an early wedding present.
But perhaps it will be someone else from Mr Ashley’s inner circle. Who knows, or dares to dream.
Sports Direct shareholders have had to get used to this sort of thing. This is what you get for giving Mr Ashley your money. They’re probably rolling their eyes and saying “what’s next?”.
More madness? Probably.
But it’s not without method. Look at the terse announcement of the firings. It said: “Following the collapse of House of Fraser on August 10 2018, and subsequent calls for an investigation into the circumstances of that collapse, the Company today announces that we have dismissed the former Directors and senior management of House of Fraser.”
There’s an ongoing furore about the the treatment of former House of Fraser customers and suppliers by Mr Ashley. I'm talking here about people with gift cards, or unprocessed online orders, or stock delivered to the collapsed retailer and not paid for.
Mr Ashley has no legal obligation to any of them - but when companies buy broken businesses they often curry favour with customers and business partners by, for example, honouring their purchases.
The Sports Direct boss, by contrast, appears to want to play hardball with them. By similarly playing hardball with the former management and directors he’s sending out a message: Blame them.
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