Mike Ashley to step down as CEO as Frasers Group’s COVID-19 recovery continues, says GlobalData

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Following today’s release of Frasers Group’s figures for FY2020/21; Juliet Cuell, associate retail Analyst at GlobalData, a leading data and analytics company, offers her view: “Following COVID-19-hit FY2020/21 trading, FY2021/22 will not only be a period of recovery for the Frasers Group, but also one of transition for the company as Michael Murray succeeds Mike Ashley as CEO. Michael Murray has spearheaded the Frasers Group’s elevation strategy, modernising stores and exploiting opportunities in the premium and luxury fashion segment. While FY2020/21 group revenues declined by 8.4% to £3,625.3m for the 52 weeks ending 25 April 2021, without the DW Sports Limited acquisition revenues on a like-for-like basis fell by 11.4%. Frasers Group notes that its online trading ‘continues to significantly outperform pre-COVID-19 periods’, however further investment in fulfilment will be crucial to remain competitive.

“Within its Premium Lifestyle arm, revenues outperformed the group, increasing by 1.9% to £735.6m driven by the opening of net four stores and an increase in online sales. Its newest Flannels store opened in July 2021 in Sheffield’s Meadowhall shopping centre and houses the first Flannels Beauty space, including a beauty changing room where customers can trial make-up before buying. This will elevate its new beauty proposition, which is up against competitors such as Next, with both players vying to establish themselves as a destination on the high street, following the struggles of traditional department stores.

“Its UK Sports Retail revenue decreased by 10.7% to £1,969.5m for the period. However, it is clear the group experienced a tough peak trading period in the run-up to Christmas with H1 2020/21 revenues comparatively better (-9.8% for the 26 weeks ending 25 October 2020) while stores remained closed for most of the second half of the financial year. Yet, prosects have improved for the company with stores reopening from April 12 in England and the beginning of a summer of sport, and the group should be able to recoup some of its lost sales. Football merchandise is proving popular with consumers and Sports Direct was ranked the third most popular retailer for purchases of this category, according to GlobalData Retail’s Euros 2021 survey conducted in July 2021.”