Follow us


Mike Ashley: has the Pac-Man of the high street bitten off more than he can chew?

Marcus Jaye
07 August 2019

You’re joking, not another one?! Many of us had a Brenda from Bristol moment when news came in on Monday that Sports Direct’s, Mike Ashley had snapped up Jack Wills. The so-called “Pac-Man of the British high street” had gobbled up yet another brand.

The preppy fashion brand had been on the block after private equity owner, BlueGem Capital, lost interest and the desire to keep injecting cash into it. Things were obviously worse than was thought with Jack Wills being put into administration and immediately sold pre-pack to Sports Direct for just £12.75 million. The deal includes all 110 UK and Ireland stores and stock, as well as a distribution centre, but not the international business.

Jack Wills was just another brand in a long list of troubled retailers snapped up by Ashley in his buying spree over the last few years. Many of these retailers have been bought for seemingly bargain prices – inspired by Ashley’s Sports Direct marketing approach no doubt – but they came with troubles and there are only so many struggling brands you can give the attention and TLC they need to nurse them back to health.

Jack Wills

Lately Ashley has also been distracted with his failed bid for Debenhams and his shareholding being wiped out, so has he really had that time? In the recent shambolic release of Sports Direct’s latest set of results, he started to lament his purchase of House of Fraser. He’s realised that House of Fraser is a serious money pit. So, why does he want even more? Just because you can, doesn’t mean you should.

Every time a brand gets into trouble, Ashley is named as a potential suitor and it’s almost becoming a joke. It’s as though he’s some magic man that knows something we don’t. The industry has been waiting, with some scepticism, on the “Harrods of the high street” rhetoric to be followed through at House of Fraser and he needs to hurry up before it all becomes too late to repair.

Social media has become a running commentary of people saying how bad their local House of Fraser has become and how it is slowing turning into another branch of Sports Direct with its Lonsdale pants and Slazenger joggers.

Maybe a sign of intention, he paid £95 million – more than he paid for the entire chain – for the freehold of the original House of Fraser in Glasgow promising to turn it into the "Harrods of the north". (Harrods must be loving all this free publicity btw). There are plans to create a mini, higher end chain of stores – around 7, including Glasgow – within the House of Fraser group, called "Frasers" with the remaining stores stocking more mainstream options.

Ashley said in the recent set of results, “On a scale out of 5, with 1 being very bad and 5 being very good, House of Fraser is a 1, albeit we are trying very hard to turn the business around this will not be quick and it will not be easy. Even though we do believe there could be a bright future for House of Fraser, and indeed have publicised our Frasers vision, which we are very excited about, if we had the gift of hindsight we might have made a different decision in August 2018 [when Sports Direct acquired House of Fraser].

“We have continued to look under the bonnet as we integrate the business, we have found that the problems are nothing short of terminal in nature,” he said. “We are continuing to review the longer-term portfolio and would expect the number of retained stores to reduce in the next 12 months.”

House of Fraser Glasgow

House of Fraser Glasgow

He needs to present his new vision starting with Glasgow store, which is already one of its premium branches, and show the industry and consumers what the plans for the roll out are.

As well as House of Fraser and Evans Cycles, he added online retailer,, this year, and then said the overall retail industry was in “dire straits”.

If this wasn’t a big enough headache, the Belgian tax authorities has just sent a payment demand for a whopping £605 million. Sports Direct has entered into a mediation process and the demand relates to the tax treatment of goods being moved intra-group throughout the EU via Belgium. Even if reduced, it’s likely to be a huge bill regardless.

As for the core Sports Direct business, profits slipped by 4.7% to £264.7 million according to the latest financial figures. The company said it will not be issuing any profit guidance for next year, but some guidance may be issued with the company’s half-year results.

It also said: “We remain very focused on delivering our elevated proposition. We will see some great milestones achieved in the year ahead, with the Flannels flagship store opening and we will commence the work to shape the Frasers Glasgow store into what we believe will be a fantastic shopping experience for our customers and showcase our intentions for the remaining portfolio of stores.”

Flannels is the bright spark within the group and the most believable part when it talks of “elevation”. Selling premium brands such as Valentino and Gucci and expanding rapidly, it would fit into this vision. As part of the Premium Lifestyle division, which also includes Cruise and van Mildert stores, it has grown from sales of £60.4m in FY17 to £173.9 in FY19.

Flannels has an ambition to open 15 to 20 stores per year until it reaches its target of 100. There are currently 43 shops with new openings in Chester, Newcastle, Watford, Sutton and York as well as the huge and much anticipated Oxford Street branch.


Flannels, Silverburn

Sports Direct Group’s head of elevation Mike Murray has said Flannels was focusing on key cities that haven’t had exposure to luxury or a well-executed luxury environment, and the new stores would not be the typical size of 2,500 sq ft or 3,000 sq ft but large destination stores.

The new House of Frasers or "Frasers" could just be an enlarged version of this, but there are only so many £800 designer hoodies they’ll be able to sell and will need incorporate more experiential services and novelties. The House of Fraser brand has been damaged and will take a lot of time and money if it’s to compete with the regional outposts of Selfridges and Harvey Nichols.

One prediction is the entire brand will be binned and disappear along with the majority of the stores and the new Frasers brand will live on in a handful of larger cities. But, this is still going to take a lot of money.

The Sports Direct Group currently operates 367 stores in England, 37 in Scotland, 28 in Wales and 17 in Northern Ireland, along with 35 other fascias including USC. This represents a net reduction of 9 stores over the prior financial year as a result of 13 openings and 22 closures. Despite the net reduction in stores the total sales area has increased to approx. 5.6m sq. ft. so it is very exposed to the current state of the high-street.

Lord Stuart Rose, former M&S chief and now chairman of Ocado, has warned Mike Ashley over his ambitions for a retail “oligopoly”, saying: “My view in retail is to stay nimble, lean and mean. You need to be able to turn on a sixpence.”

This shopaholic nature of brand buying and lack of investment in what he already owns is a confusing and dangerous combination. Ashley needs to slim everything down, keep what’s working and be ruthless. (That last bit shouldn’t be a problem).

We’re all hoping Ashley’s game plan, whatever it is, is successful because he now owns a huge slice of the British high street. FYI - Spud-U-Like is still available… #harrodsofthehighstreet

Free NewsletterVISIT