Ashley shows himself to be Debenhams puppetmaster
The bullish businessman will cherry-pick the assets he likes and dispose of those he doesn’t
The chief executive of the Sports Direct Group, Mike Ashley, giving evidence before a UK house of commons committee in December. Photograph: PA Wire
On Thursday, the bullish businessman firmly yanked the strings of the retailer’s top brass and removed them from the board. While chief executive Sergio Bucher will stay on in his executive role (just not on the board), chairman Ian Cheshire had his ties with the ailing retailer abruptly cut.
Ashley’s moves are understandable considering the retailer’s market value has fallen 80 per cent after a string of profit warnings. The latest trading update this week contained yet more bad news, reporting that sales fell over 6 per cent over the Christmas season at a time when tills should be ringing.
But staff at the chain are none the wiser when it comes to their long-term job prospects. Cynics may view Ashley’s actions as an attempt to ensure the retailer is eventually forced to fall into his arms. He has made no secret of the fact that he wants House of Fraser and Debenhams to have a closer relationship.
At a meeting of a UK House of Commons committee in December, Ashley reaffirmed his position that the high street is in rather serious trouble. “The internet is killing the high street,” he said, noting that the company he runs won’t be pleased with his calls for a tax on internet businesses.
The chief executive of Sports Direct and owner of Newcastle United football club isn’t playing Geppetto out of the goodness of his heart, however. Having saved House of Fraser and taken such a significant stake in Debenhams and French Connection UK, his bets on bricks and mortar are such that they must be successful.
The controversial businessman is no fool and, as his House of Fraser acquisition showed, he has no interest in overpaying for damaged goods. Instead, he’ll cherry-pick the assets he likes and dispose of those he doesn’t.
For Ashley, the curtains are about to close on this chapter of Britain’s high street woes. With global trade worries and Brexit in the cross hairs, one wonders how he’ll handle the sequel.