Mike Ashley’s results will be gripping, but probably not in a good way


Can the annual results of Frasers Group, sportswear baron Mike Ashley’s retail empire, be any more exciting than last year’s?

This time in 2019, when Ashley’s business was better known as Sports Direct, several putative deadlines for the figures’ publication came and went throughout the day. In the end the figures were published a mere 10 hours late – and after the stock exchange had closed. As one analyst put it, it was a “total and utter shambles” – and that is before we get to their contents.

There was a bombshell €674m (£608m) tax demand from the Belgian authorities – which has since been defused – and an admission that the financial problems of House of Fraser, which it had bought a year earlier, could be “terminal”. The 38-page document also saw Ashley putting the world to rights, including floating the idea that the chief executives and finance directors of all listed companies should take voluntary drug tests so as to avoid being blackmailed.

Ashley is a man who can turn even the staid world of auditing into a blockbuster. In the wake of last year’s debacle, Frasers parted company with accountancy firm Grant Thornton – which contributed to the delay that preceded the results’ publication.

The maverick businessman had been keen to appoint one of the “big four” accounting firms – Deloitte, PwC, KPMG and EY – in its stead. But all four refused the business, citing problems such as conflict of interest. In the end it hired RSM, the seventh-biggest.

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So have all the i’s been dotted and the t’s crossed this time around? We’ll find out. In a stock exchange statement last month, Frasers said it “anticipates, subject to the satisfactory completion of the audit” that the company’s full-year results will be published on 13 August 2020. What we don’t know is how much (or how little) work the word “anticipates” is doing in the sentence.

It is hard to imagine Ashley having lots of goods news to share with the City. What retailer does? The lockdown has been devastating for the high street (lest we forget, Ashley had to issue a public apology after he tried to keep his Sports Direct chain open, arguing that it was an essential retailer). There is also the recent Guardian investigation that found his warehouse workers potentially earning less than the minimum wage since they were unable to leave the warehouse on unpaid breaks.

The past year has also not been kind to department stores. John Lewis is closing sites, Debenhams is back in administration and Frasers is expected to confirm more House of Fraser store closures. Last year Ashley had this to say: “On a scale out of five, with one being very bad and five being very good, House of Fraser is a one.” It’s hard to imagine that the pandemic has helped the scoring.

Ashley, we know, wants to move from selling discounted trainers and tracksuits to selling expensive designer trainers and tracksuits. Key to this is Flannels, the group’s designer fashion chain, and this move upmarket presumably is the rationale for its recent stake-building in British handbag brand Mulberry and suit maker Hugo Boss

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Sophie Lund-Yates, analyst at City firm Hargreaves Lansdown, says Frasers has been “very quiet” during the current crisis – and the results will be the first indication of what store closures have meant for the group’s finances. “Coronavirus will seriously interrupt revenues and profits. We just don’t know by how much.”



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