Mike Ashley’s Frasers Group has confirmed that talks are taking place over a leadership reshuffle which would see its founder step away from his role as the firm’s top boss.
The parent company of retail chains Sports Direct, House of Fraser and Flannels said that Michael Murray – Mr Ashley’s prospective son-in-law – will become the chief executive officer in May next year.
It added that, should Mr Murray become chief, Newcastle United owner Mr Ashley will step down from the role but remain on the board as an executive director.
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The company also revealed that its profits plunged for the past year after sales were impacted by enforced high street closures during the pandemic.
The retail giant said that pre-tax profits dived by 94.1% to £8.5m for the year to April 25, compared with £143.5m in the previous year.
And it has warned that it fears restrictions on shop openings could return, meaning that it has not given the usual guidance on how it expects to perform financially this year.
Mr Ashley said: “The group is continuing to invest in its physical and digital elevation strategy and our omni-channel offering is growing in strength.
“Our stores in the UK have reopened above expectations and our online channel continues to significantly outperform pre-Covid-19 periods.
“None the less, management remains of the view that there is a high risk of future Covid-19 pandemic restrictions, likely to be over this winter and maybe beyond.”
Frasers Group chair David Daly thanked the Government for the support given through the furlough scheme and business rates relief but warned that the return of business rates would threaten a number of House of Fraser stores.
He said that the group was also looking to take on a number of former Debenhams stores, but this plan was threatened by “excessive business rates that make the viability of these investments, and the jobs that could be created, less likely”.
Mr Daly added that “there still seems to be very little tangible long-term action being taken by the Government to save the high street”.
The company is not proposing to make any payment to shareholders.
