New boss of Ashley’s retail empire promises City relations reset

The new chief executive of Sports Direct owner Frasers Group wants to rebuild the company’s often fractious relations with the City and may unwind some of its many investments.

Michael Murray, who took over as chief executive in May shortly before he married the daughter of Sports Direct founder Mike Ashley, told the Financial Times that Frasers was “definitely going to be increasing its efforts” to build bridges with the investor community.

“We are currently hiring for an investor relations manager and building up more communication and we will be looking to do a capital markets day,” he said.

The group has already appointed Numis as joint corporate broker and PR agency Brunswick to handle financial communications.

Sports Direct rebranded itself as Frasers after Ashley bought the House of Fraser retail chain out of administration in 2018.

Ashley founded Sports Direct in the early 1980s and took it public in 2007, The company shied away from the scrutiny that goes with a stock market listing, tending to update investors only twice a year, at full-year and half-year results, and providing only the most basic financial guidance.

Its acquisition strategy, which often involved taking non-controlling stakes in listed businesses, bemused some investors. Murray said future purchases would be a lot more selective.

“If it doesn’t fit into sport, premium or luxury or add value to our ecosystem or platform . . . then we won’t be buying it,” he said.

Since taking over, Murray has acquired struggling ecommerce retailers Missguided and I Saw It First but sold the group’s stakes in Bobs Stores and Eastern Mountain Sports, saying he “didn’t believe they were core to the group’s strategy”.

But he declined to specify which of Frasers’ other investments, which range from Evans Cycles to former catalogue retailer Studio Retail, might be offloaded.

Ashley’s relations with analysts and minority shareholders were sometimes strained but he has not shown any interest in taking the company private again.

Murray said his conversations with shareholders indicated that “they want to see more of what we are doing and how quickly we can go”.

“Obviously they like the financial results . . . they want us to keep investing in the things that work and stay focused,” he said. At its full-year results, Murray said Frasers would achieve adjusted pre-tax profit of between £450mn and £500mn, despite the darkening economic clouds.

One analyst said he would welcome a less adversarial approach, more contact with senior management and more disclosure about the returns generated by the group’s “elevation” strategy, which involves heavy capital spending on store fit-outs.

But he added that so far it was business as usual. “There has been absolutely no change yet — at the prelims [in July] we were all basically told: get our questions in now because you won’t see us for another six months,” he said.