This is old news but its worth reminding people what Ashley is about.Ashley’s monument to ambition
The secretive Sports World founder has built a complex the size of 18 football pitches ahead of his float, write Jenny Davey and Graham Hind
IN the unlikely outpost of Shirebrook, a former Derbyshire pit village, Mike Ashley, the secretive sportswear billionaire, has built the Taj Mahal of sportswear retailing. Backed by a government grant of £1.9m administered by the East Midlands Development Agency, Ashley has quietly constructed one of Britain’s biggest distribution centres at a site that once churned out 1.6m tonnes of coal a year.
Opened last Easter, the £30m centre covers an area the size of 18 football pitches and is a monument to Ashley’s ambitious vision to build Sports World into the world’s biggest sports retailer.
This weekend Ashley’s advisers are putting the finishing touches to plans for what would be Britain’s biggest-ever retail stock-market flotation. It is expected that the business will have an enterprise value of about £2 billion.
The proposed float is raising eyebrows for two reasons. First, his advisers at Merrill Lynch, Citi-group and Credit Suisse are the bankers who brought us the damp-squib Debenhams listing; Debenhams shares closed on Friday at 171p, compared with the flotation price of 195p.
Second, Ashley is considering paying himself a one-off prefloat dividend of up to £300m. Yet just days ago thousands of his workers were told they would miss out on £1,000 payouts he promised them last June. (Sports World declined to comment.) Critics say getting the float away will be hard. One retail analyst said: “This is a down-and-dirty trading organisation. The valuation seemshigh and there is a management team that has no history of working in the City.”
That seems not to worry Ashley, 42, who is a close friend of Sir Philip Green, the billionaire owner of BHS and Topshop, and of Paul Kemsley, the Tottenham Hotspur director turned property entrepreneur.
“He hasn’t got a suited and booted City-friendly management team, but who wants that? Buy Next if that’s what you want,” said one of his supporters.
Although he is the owner of the
Lillywhites sports store in Piccadilly Circus and some of Britain’s best known sportswear brands — including
Kangol, Donnay, Slazenger, Dunlop, Lonsdale and
Karrimor — Ashley is hardly the typical public-company chief executive. Chubby and slightly scruffy, this former Buckinghamshire country squash coach prefers shirts and jeans to suits. Associates describe him as down to earth, friendly and self deprecating; but he has no time for media relations. Having long refused face-to-face interviews, he last week relaxed only a little by releasing a new photograph of himself.
Ashley has created enemies — not least because he blew the whistle about the price-fixing of replica football kits.
If he gets the float away it will cap a remarkable career. He began trading on the high street in the 1980s, opening Sport and Ski shops in and around London. The chain expanded quickly, funded by private money and profit from the stores. By the late 1990s he had rebranded the chain Sports Soccer and opened stores across the country. As a “sole trader”, he was exempt from filing accounts at Companies House. But in 1999 he incorporated the business and in 2002 its true extent was laid bare for the first time when Ashley was included in the Sunday Times Rich List.
Over the past five years Sports World has overtaken rivals JJB and John David Group to become Britain’s biggest sportswear retailer, forcing many small independent chains out of business through aggressive price-cutting. It is now thought to have about 25% of the £3.6 billion British sportswear market.
The Sports World mega-store in Shirebrook reputedly sells £8m-worth of goods a year. Up the ocean liner-style staircase clothes go for as little as 50p. Even golf clubs were being sold for as little as £2.50p last week.
In contrast to his rivals, Ashley was not content with simply selling branded sportswear goods. He bought the brands and switched manufacturing to the Far East. “If you buy very big volumes in the Far East, you can move the price point by as much as 15% to 20%,” said one City source.
Ashley can use the cost savings to slash the prices of bigger brands such as Adidas or Nike. “His strategy is to get people into the stores by selling Adidas cheaply and then maybe they will also buy that Lonsdale sweat-shirt,” said one source.
The goods arrive from the Far East around the clock at Shirebrook, which is transformed from the days when it was the boyhood home of Ray Wilson, one of England’s 1966 World Cup stars.
Many of the 900 workers at the distribution centre are from Poland. Signs are in Polish as well as English,
(no wonder Nick likes him) and the number of Poles has attracted protests by the British National Party and trade unions, although those groups have in turn faced condemnation from Communities Against Racism.