‘A more palatable Mike Ashley’: Sports Direct owner has a new boss | Fraser Group
DDressed in a casual t-shirt and sweater with bronzed, slicked-back hair, Michael Murray jokes with the film crew as he films a clip for social media surrounded by glass walls from floor to floor. ceiling at Frasers Group’s London headquarters.
As the 32-year-old former nightclub promoter takes the reins of the retail business that owns Sports Direct, House of Fraser and Flannels this week, the image change at the helm couldn’t be better understood. company founded by Murray’s future father-in-law, Mike Ashley.
Ashley, Frasers’ majority shareholder who will remain executive director of the board, has a difficult relationship with the media, rarely giving interviews or holding press conferences.
Before launching Sports Direct in 2007, he was so reclusive that the only available photo of him was from the 1970s when he was a county squash coach. Since then, Ashley has appeared before MPs and given annual presentations to analysts and the media, but is clearly uncomfortable in the spotlight and runs Frasers as a quasi-private company under the thumb of its now 67% stake. .
In contrast, Murray posts company updates on social media, such as photos from a meeting with Hugo Boss executives in Germany last month, and gives detailed press interviews outlining his thoughts. on the strategic orientation of the company.
Avoiding the company’s cut-price heritage, Murray spent millions of pounds on a new central London headquarters and flagship for luxury chain Flannels and funded glossy adverts for Sports Direct featuring featured famous athletes including tennis champion Emma Raducanu and footballer Jack Grealish.
In his latest LinkedIn profile, Murray announces plans to “accelerate the group’s strategy” with a vision “to serve our customers with the best sports, premium and luxury brands in the world”.
Murray, who has collected more than £33m in payouts over the past four years under a controversial pay scheme linked to the value he has created from a series of property deals, will be certainly encouraged to do well. He is in line for a £100million bonus if he more than doubles Frasers’ share price to £15 by 2025.
The new pay deal underscores a meteoric rise for Murray who began helping Ashley with property deals a few years after meeting her daughter Anna on vacation in 2011.
His career began with racing festivals and student parties while still at the University of Reading after attending private Sedbergh School in Cumbria. No doubt inspired by his father, a property developer who is Doncaster’s biggest landlord, he also invested in two bars while still a student.
Working as a consultant for Frasers, Murray was instrumental in transforming Flannels from a small regional brand into a chain of around 50 stores.
Those who have dealt with Murray describe him as brilliant with a polite manner and clear ideas on how Frasers should move forward.
“He’s a more acceptable version of Mike Ashley,” says one former worker. “He is charming and quite measured, and knows what he is talking about. But it’s a very big concert for him.
Another says Murray’s efforts are more about improving the surface image in a way that will please the brands rather than the world for the workers behind the scenes.
“Removing Mike Ashley is just a matter of image. [Murray] is almost like a mini Mike, an apprentice. My perception was that he never called the shots, just the one doing the heavy lifting.
Whoever really sets the strategy, Frasers fights to keep brands like Nike and Adidas happy without profits plummeting. With potentially insufficient cash available from buyers and inflation on wages, cost of goods and transportation, this could prove to be a daunting task.
Most Sports Direct stores still need updating while there are also serious challenges ahead at House of Fraser, struggling department store Ashley snapped up in 2018 which needs big investment or more hacking .
The chain has already shrunk to less than 40 outlets from 59 during the acquisition, and industry insiders say the investment is on hold with more stores likely to be converted to flannels or shelved. Its shrinking scale makes the rationale for recent acquisitions of struggling brands – which could be useful in a midsize department store like Jack Wills and Sofa.com – look like rather costly diversions.
In a tight labor market, Frasers has some way to go to improve its image as an employer after years of concern over low pay and accusations of mistreatment of staff in stores and at its huge warehouse in Shirebrook. In addition to attracting and retaining talent, it must deal with investors who have never been so concerned about environmental, social and governance (ESG) issues.
“He has to be a force for ESG improvement or he will find that the pool of investors will shrink. It is in everyone’s interest to focus on that,” says Jonathan Pritchard, retail analyst at Peel Hunter.
Murray has certainly attempted to subvert Frasers’ image on staff relations, with a generous bonus scheme for 1,000 top employees – albeit with the rather stretched target of the group’s share price remaining above of £10 for 30 consecutive days over the next four years. The last time he came close was in 2014.
Bringing about real culture change will require delicate political maneuvering to retain the benefit of Ashley’s indisputable retail expertise in a more modern environment.
Prichard said:[Murray] must demonstrate that he can make strategic decisions himself. I’m sure he can, but he has to cut the strings of the puppet without firing the puppeteer. »