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Billionaire retail tycoon Mike Ashley is to change the name of Sports Direct to Frasers Group next month as he seeks to shed the company’s bargain basement reputation and image.
Although the public limited company will adopt the Frasers name, the 450 Sports Direct stores in the UK will retain the original name and distinctive red and blue branding. The 253 European stores will also be unaffected.
It follows the retailer’s announcement that it will launch new upmarket outlets of House of Fraser, which the controversial tycoon acquired out of administration in August 2018 for £90m. Frasers is the name he has chosen for these outlets.
Mr Ashley is spending roughly the same amount again to acquire the freehold to the original Frasers store in Glasgow, which will be the flagship outlet. Further branches will be located in Liverpool, Belfast and Wolverhampton.
In a notice convening the annual meeting, the company said the change of name “is reflective of the business strategy of the company to elevate its retail proposition across all channels” and demonstrated its transformation “into the holder of a diversified portfolio of sports, fitness, fashion and lifestyle fascias”.
In addition to Frasers, the group also operates about 50 luxury fashion stores under the Flannels brand, the logo of which adorns the tail fin of Mr Ashley’s executive jet, and USC, a fashion chain that Sports Direct acquired from Scottish entrepreneur Tom Hunter in 2011.
Matt Clark, a managing director in retail practice at AlixPartners, said the announcement showed Mr Ashley had lost none of his ability to surprise investors.
He added that it was “a clear sign of his desire to shed the ‘tracksuit king’ image he feels fails to recognise his obvious talents as a retailer”.
The Sports Direct name is associated in many consumers’ minds with cluttered stores, discount prices and negative press coverage about corporate governance and working conditions in its Derbyshire distribution warehouse.
“It’s a bold step and is going to require significant investment in brand and customer propositions,” Mr Clark said.
The name change suggests Mr Ashley — and Michael Murray, his future son-in-law who is increasingly influential within the business — intend to plough on with the transformation of the remainder of the House of Fraser estate.
Over the summer, Mr Ashley suggested the acquisition of House of Fraser was a mistake. He also revealed the chain had lost £54m since the acquisition in August last year to the end of the financial year in March.
The remaining House of Fraser stores will retain their original branding, although it is likely that a number will close after Christmas amid weak trading and with landlords in some cases eyeing alternative uses for the real estate.
The annual meeting to approve the name change will take place on December 16 in London. It requires 75 per cent approval, but Mr Ashley owns about 62 per cent of the shares.
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