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Sports Direct will release its annual results on Thursday – and what year was that of Mike Ashley and his growing retail empire.
After a few years of criticism of working conditions in the Sports Direct warehouse by MPs and shareholders, Ashley tried to reinvent herself as a savior on the street.
The billionaire of Sports Direct has made many acquisitions and tried to acquire companies in difficulty. The most important was House of Fraser, which Sports Direct bought from the administration last August for £ 90m. Since then, the company has also purchased Evans Cycles, Sofa.com and Game Digital.
He also tried unsuccessfully to buy Debenhams and Findel, the retail and online education group. Other businesses that Ashley has planned to acquire in the past year include Patisserie Valerie, LK Bennett and Hamleys.
Some badysts argue that this burst of activity is more logical than it seems. They say the acquisitions give Ashley greater buying power. Evans completes the Sports Direct retail business and Sofa.com is already a supplier of House of Fraser.
But these transactions have increased the company's exposure to the UK market as the retail market is under pressure as buyers connect online, driving up business rates, rents and rising wages. . In addition, household budgets remain tight and the economy is slowing.
Ashley acknowledged these pressures in December, when he warned that the high street might be "broken" by weak trade. At the same time, he called for a tax on retailers who make more than a fifth of their sales online, to prevent the Internet from killing traditional shopping streets.
Sports Direct has not released any updates on trading since the end of 2018, leaving badysts in the dark about its performance this year and wondering what the balance sheet would look like after the Ashley acquisition.
In December, Sports Direct revealed that House of Fraser was losing nearly £ 3 million a week. These losses weighed on the performance of the Sports Direct Group, which recorded a 27% fall in underlying earnings, to £ 64.4 million in the first half of the year.
Independent retail badyst Nick Bubb said, "The company has not said anything about its performance since the interim of December, focusing on the series of bizarre acquisitions. I suspect that UK sports retail deals have been disappointing and that Mike's acquisitions have been rather disastrous, especially House of Fraser. "
Ashley is going up in the world after building her empire selling cheap sportswear in difficult and ready stores. His stated goal is to make Sports Direct "the Selfridges of Sport" and House of Fraser "the Harrods of the high street". This aspiration may have been behind the recent departure of Karen Byers, her right-hand man for 28 years, and the incarnation of the company's traditional strategy of making bargains. Michael Murray, the 29-year-old partner of Ashley's daughter, whose job is "Head of Elevation", is the rising star of the company.
Ashley's dominance within the company he has created is such that it's easy to forget that he owns only 61.5% of Direct Sports. Many fund managers have grown tired of dealing with the company and sold their shares.
Ashley will present the results for the year end of April of the flagship branch of Oxford Street of its upscale chain Flannels, which should open soon. There will be a lot to say for those who have the will.
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