The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Mike Ashley is best known for selling cheap tracksuits in the UK Now, he is thinking more like a bling king.
The billionaire behind Sports Direct, who bought out the fancy but failing department store chain House of Fraser in 2018, is elevating a scion to a senior role, just as it’s been done at LVMH Moet Hennessy Louis Vuitton SE and Prada SpA. Ashley’s company — now Frasers Group Plc — confirmed he was preparing to hand over his chief executive officer role to his future son-in-law, Michael Murray.
Ashley often ends up in exactly the right place in terms of business. But to get there he takes a circuitous route that flies in the face of best practices in corporate governance. Appointing his successor may well fall into this category.
Murray is engaged to Ashley’s daughter Anna. He is not on the board, but began working with Frasers in 2016 as a consultant on property deals. Ashley could have avoided any shareholder hesitancy by taking the company private, as I’ve long argued he should have. He already holds a 64% stake in Frasers.
But Ashley is used to controversy. His company — which runs Sports Direct as well the luxury boutique Flannels — was slammed by lawmakers five years ago over “Victorian†conditions in its Shirebook warehouse. A court case a year later brought by former employee Jeff Blue who alleged he missed out on lucrative bonuses included testimony describing his drinking antics, including ending a night out vomiting in a fireplace. In a farcical episode, the company had to delay its annual results in 2019 after discovering a big tax bill, although it later said this wouldn’t be such a big problem after all.
At LVMH, four of founder Bernard Arnault’s children are involved in the world’s biggest luxury group. Meanwhile, at Prada, Lorenzo Bertelli, the 33-year old son of Miuccia Prada and co-CEO Patrizio Bertelli began working at the house three years ago, and recently joined the board. No succession plans are in place yet, but the founders’ children are clearly in pole position — although whoever gets the job must be well qualified. There is an argument for populating the top ranks of the big luxury groups with kids of the bling generation, although the question remains as to whether they need to be related to the controlling shareholder.
—Bloomberg