Ever since he grew to become chief govt of Frasers Group – the retail mix managed by Mike Ashley that owns names like Sports Direct, Evans Cycles, Flannels, Game and House of Fraser – Michael Murray has needed to put up with ideas that he’s not his personal man and that Mr Ashley is de facto pulling the strings behind the scenes.
Those ideas continued to hold within the air even after, in September, the corporate introduced that Mr Ashley – who retains a 69.11% stake in Frasers – can be stepping down from the board.
Eyebrows have been raised, particularly, at information that Mr Ashley had made a £100m mortgage facility out there to the corporate for unspecified functions.
Meanwhile, the stake-building in different companies which were such a trademark of Mr Ashley’s method of doing enterprise – even when, as with Debenhams, they’ve ended up dropping cash – has continued, with Frasers lately taking a 5% stake within the on-line style retailer Asos and elevating its stake in Hugo Boss, the style home, to 34%.
So Thursday morning’s half 12 months outcomes have been an opportunity for Mr Murray to focus on how he’s placing his stamp on the corporate.
The outcomes themselves level to a enterprise seemingly bucking the downturn in retail gross sales.
A pre-tax revenue of £284.6m for the 26 weeks to 23 October was up 53% on the identical interval final 12 months whereas gross sales rose by almost 13% to £2.6bn.
Part of that mirrored one-off advantages from asset disposals and the advantages of acquisitions such because the quick style on-line specialists Missguided and I Saw It First. (One fascinating side-note to immediately’s outcomes was that Manchester-based I Saw It First, beloved of contestants on ITV’s Love Island, was snapped up by Frasers for a mere £1 again in July).
So you will need to strip away these one-off elements and take a look at the underlying image.
Here, Mr Murray believes his ‘elevation technique’ – investing extra in flagship shops, deepening ties with model homeowners like Nike and shopping for up-market and aspirational retail codecs like Flannels – is paying off.
He instructed Sky News: “We’ve been on this journey now, the elevation strategy, over the last five, six years. And really we’re starting to get such strong momentum with our brand partners.
“Frasers Group is a number of totally different enterprise to what it was just a few years in the past. We’re properly diversified inside the sport, the premium, the luxurious phase, so we’re simply very well positioned to capitalise on developments, model developments, but additionally providing our customers alternative as properly.”
He said Flannels was the fastest-growing of the group’s various retail fascias, generating more than a fifth of underlying sales growth during the half, with more store openings planned.
He added: “Our quickest rising fascia is Flannels, the luxurious phase – we’re opening luxurious shops in regional markets the place there is not any entry to luxurious manufacturers. And actually we’re growing a brand new buyer which we prefer to name as the brand new luxurious shopper that are youthful, extra demanding, than another shopper set and we’re actually tapping into this shopper with luxurious manufacturers.
He mentioned in the end the group might open as many as 100 Flannels retailers within the UK and Ireland.
Mr Murray additionally had a response to those that counsel the fixed stake-building and buying of different retail manufacturers is proof of Mr Ashley, his father-in-law, behaving as a back-seat driver.
Rather, he argued, it’s all a part of the elevation technique.
He went on: “A lot of other retail businesses on the high street are now starting to adopt this entrepreneurialism, of buying strategic investments or buying brands, and really we have three areas to our strategic acquisitions.
“One, does it give us the entry to extra manufacturers or personal manufacturers corresponding to Gieves and Hawkes?
“Two, does it help our platform, whether it’s a payment solution or whether it’s warehousing?
“And three, does it enhance distribution channels and provides us entry to a unique shopper, corresponding to homewares?
“So we have a very strategic plan and I think the DNA which Mike’s built up over the last 35 years continues on…I think you’ll start to see a lot more successful retailers on the high street adopting a similar model to what we’ve done for the history of the group.”
Mr Murray insisted the stake-building in companies like Asos was not a distraction to administration.
He added: “I think it goes hand in hand with the elevation strategy – it’s all to drive synergies for the group. It’s not off-piste, it’s exactly in line with what we’re trying to achieve with the elevation strategy. I think it’s actually hand in hand and it complements what we’re doing.”
To that finish, the latest acquisition of Gieves & Hawkes, some of the storied names on Savile Row, can be seen as taking the enterprise in a extra aspirational path, as can the stake-building in Hugo Boss.
And the £100 million credit score line made out there by Mr Ashley?
Mr Murray responded: “That was just a sign of a show of confidence – that he’s not stepping back in the business. He believes in the business more than ever.
“It’s most likely… higher…if he is not on the board and is not concerned day after day, as a result of the technique is working so properly, particularly with third social gathering manufacturers corresponding to Nike. It’s higher that he leaves me to it.
“It isn’t like is he was retreating from the business and didn’t support the business. The £100 million [facility] is a show of intent, that he still fully backs us as a management team as a business and our strategy.”
In spite of what was, on the face of it, a stable buying and selling replace, Frasers shares – which till the shut on Wednesday had risen by 16% for the reason that starting of the 12 months – fell by as a lot as 10% at one level, traders taking fright at an outlook assertion which famous: “The macroeconomic environment is clearly challenging and the backdrop for the coming year is hard to predict with any certainty.”
That mentioned, the corporate reasserted immediately that it expects to report a full 12 months pre-tax revenue, on an adjusted foundation, of between £450-£500million, in keeping with earlier forecasts.
Mr Murray mentioned this was a “conservative and realistic” evaluation.
For customers, in the meantime, there was excellent news on inflation. Mr Murray believes it has “definitely” peaked, as evidenced by latest declines in charge prices, which he mentioned meant the group can be “very cautious” when it comes to elevating costs.
In the meantime, although, it appears Frasers stays very a lot on the hunt for additional acquisitions each on the excessive avenue and in on-line style retailing.