Share buybacks help Ashley tighten grip on retail empire

MIKE ASHLEY is tightening his grip on his retail empire Frasers Group as share buybacks help consolidate the billionaire’s control over the company.

Frasers yesterday announced a fresh buyback, with plans to purchase £80m worth of its own stock. It is the latest in a series of share repurchases intended to reward investors by putting money in the pockets of those who want to sell.

Frasers has launched five separate share buybacks in the past year alone.

Mr Ashley, 59, holds just over 330m shares in Frasers. His stake has marginally increased, suggesting he is not selling his shares.

Shares bought by Frasers are subsequently cancelled and the net result of the market activity is Mr Ashley is consolidating his control. The billionaire has already grown his stake from 63pc in late 2019 to 73pc.

Clive Black, at retail analyst Shore Capital, said the latest buyback would only marginally increase Mr Ashley’s ownership. The plan was instead intended as a show of strength. He said: “It’s telling the market that this business is in really good shape, so much so that after paying a dividend, investing in the business and investing in equity positions in Asos and Boohoo, they still have the cash available to do a buyback.” Mr Ashley founded the business from a single Sports Direct store in Maidenhead in 1982. It has since grown into a major retail empire worth £3.69bn, with brands including Flannels, House of Fraser, Evans Cycles and Jack Wills.

It has managed to avoid Being hit by a wider downturn in consumer spending.

In December, Frasers said it was confident it would grow profits this year and was on course to achieve adjusted pre-tax profits of between £500m and £550m in the year to April, up from £478m the prior year.

Mr Ashley stepped down from the helm of the retail giant in 2022, handing over the chief executive post to his sonin-law, Michael Murray, who has focused on modernising its image and taking the company more upmarket.

However, Mr Ashley is understood to still play a role in steering the company’s direction. Recent swoops for stakes in rivals Asos, Boohoo and Currys bear his hallmark. Frasers is now the largest single shareholder in Boohoo and is the second largest shareholder in Asos.

Mr Murray told The Telegraph last year that Frasers had always been acquisitive and said he sought advice from his father-in-law. However, he said the final authority rested with him.

Yesterday, N Brown, which owns retailers including JD Williams and Jacamo, revealed that Frasers had bought more shares, taking its stake from 19pc to 20pc.