Mike Ashley’s Sports Direct International, which has attracted criticism from politicians and investors over working conditions and its approach to business, has announced plans to rebrand itself as Frasers Group.
The retail group, which has a market value of £1.8bn, said it was seeking to “elevate” its image beyond the sportswear through which the billionaire chief executive made his fortune.
Shareholders will vote on the name change at a general meeting in London on 16 December. The company requires 75% of the votes cast at the meeting to change the name, but Ashley owns 65% of the shares.
The unusual move for a FTSE 250 company comes after Ashley led a year-long buying spree of struggling retailers, most notably House of Fraser in a £90m deal. Other retailers bought in the last 18 months by Sports Direct include Evans Cycles, Sofa.com and Game Digital, as the company took over large portions of the British high street.
Ashley also attempted takeovers of Debenhams, another stalwart British department store chain, and Findel, the online retail and education group, as well as considering bids for cafe chain Patisserie Valerie, clothes retailer LK Bennett and toy shop chain Hamleys.
The Sports Direct chain of shops will not be renamed, but the move to change the group name to Frasers follows a string of scandals over working conditions at Sports Direct, as well the company’s unusual corporate governance arrangements.
Nearly a third of investors independent of Ashley voted against him continuing as chief executive in September. Shareholders in July objected to the shock revelation of a £605m tax bill from Belgian authorities, as well as the delay in appointing an auditor. In October the company finally appointed a new auditor, more than a month after an acrimonious split with Grant Thornton over delayed accounts.
In May the company said it would use the Frasers name to rebrand some House of Fraser stores as a new luxury mini-chain selling more expensive labels. Ashley has expressed regret at taking over House of Fraser.
In July, he described some of the problems at House of Fraser as “nothing short of terminal in nature” and gave it a rating of one out of five. It made a £54.6m operating loss in its last financial year, worse than the £50m expected by analysts.
In a letter to shareholders, David Daly, Sports Direct’s non-executive chair, wrote that the name change reflected the group’s desire to “elevate [the] retail proposition across all channels”. He added that it “demonstrates the transformation of the company over recent years into the holder of a diversified portfolio of sports, fitness, fashion and lifestyle fascias”.
The change of name will not affect shareholder rights, and the company said existing share certificates would remain valid.