Shares in Sports Direct owner Frasers (FRAS) firmed 4.5p to 619.5p as the retail conglomerate posted robust full year results, with underlying EBITDA up more than 29% to £391 million despite revenue falling 8.4% as stores were shuttered for around six months due to Covid.
Yet the figures were somewhat overshadowed by the news shrewd retail operator Mike Ashley is to step down as CEO, with his future son-in-law Michael Murray set to assume the role in May 2022.
Murray may be taking the top job, but Ashley is Fraser’s majority shareholder, will remain on the board as an executive director and will still be closely involved in the group’s successful ‘elevation strategy’.
Frasers insists the strategy is ‘transforming the business and receiving positive feedback from consumers and our brand partners, especially on projects such as the new Oxford Street Sports Direct which opened in June 2021’.
‘Ashley has often been unpredictable, outspoken and uncooperative, so Murray might bring a sense of order to the boardroom’, commented Russ Mould, investment director at AJ Bell.
‘One thing is for certain, he will take over at a time when a solid strategy has been put in place so don’t expect any radical changes for where the business is going.’
Frasers’ results for the year ended 25 April 2021 demonstrate how lockdowns and restrictions on trading knocked the retail sector for six at various points over the past year.
Sales were down in all divisions of the group apart from its Premium Lifestyle arm, which will please Ashley as this part of the business is central to his efforts to take Frasers upmarket. The Sports Direct stores are also starting to look tidier, which will please brands such as Nike with how their products are displayed.
While Frasers’ UK stores have reopened ‘above expectations’, with the online business continuing to ‘significantly outperform pre-Covid-19 periods’, the Flannels-to-House of Fraser owner refrained from giving guidance for the current financial year due to ‘a high risk of future Covid-19 pandemic restrictions, likely to be over this winter and maybe beyond’.
‘For all the criticism Ashley receives, he generally has a good eye on what’s happening in the retail world,’ continued Mould.
‘A very cautious tone towards the near-future due to potential Covid flare-ups sends a warning across the sector to be alert to more setbacks.’