Ashley’s retail group ready for FTSE 100 return
Leisurewear tycoon Mike Ashley will mark his return to the big league next week and some overdue progress for the retail sector when his Frasers Group joins the stock market’s blue chip companies.
The group, which embraces Sports Direct, Evans Cycles, Jack Wills, Agent Provocateur and Flannels, as well as the House of Fraser department stores, will be elevated to the FTSE 100 index with a value of £3.8 billion.
That makes it bigger than Edinburgh finance house Abrdn, worth £3.24bn, which is among those demoted to the FTSE 250 following a poor run which has seen its shares fall by more than 40% over the past year.
Frasers will take up the slot left by Meggitt, the defence giant worth £6.25bn, which drops out of the top flight following its takeover by US firm Parker-Hannifin.
Mr Ashley, a former Rangers shareholder, owns 69% of Frasers – worth about £2.6 billion – and likes to keep tight control of its operations. It has brought him into conflict with the City which demands full transparency. His son-in-law Michael Murray took over as chief executive this year.
Despite the retail sector’s woes, particularly its troubles on the high street, shares in Frasers have risen by a third in the past three months and have more than quadrupled since their Covid lows.
The company was last in the FTSE100 six years ago – then known as Sports Direct – before a allegations of poor working terms and conditions for staff saw its shares slump, leading to it being dumped out of the index.
Mr Fraser, 58, who is said to be worth £4 billion, sought to restore its reputation by taking it upmarket. He acquired the House of Fraser department stores in 2018 and has invested in the luxury chain Flannels which is due to take the Princes Street, Edinburgh, unit vacated by Bhs.
Frasers’ progress is in marked contrast to other big retail businesses. Primark’s owner, Associated British Foods, and online operator Asos last week both reported challenging market conditions.
Despite closing the historic Jenner’s store in Edinburgh and some under-performing House of Fraser stores, Frasers Group has expanded by acquiring distressed assets such as Missguided and Studio Retail.
UPDATE 11 Sept: Mr Ashley is said to be keen on a takeover of Savile Row tailor Gieves & Hawkes.
Mr Ashley’s Frasers Group is one of a handful of bidders vying for control, according to Sky News.
Gieves & Hawkes, which can be traced back to 1771, is up for sale after its Hong Kong-based owner Trinity Group collapsed last year.