Look back over the past, with its changing empires that rose and fell, and you can foresee the future, too. (Marcus Aurelius)
While much of the old guard in retail seems to be crumbling throughout Britain’s high streets, with established names falling by the day and those who survive instead seeking refuge online, two men are seizing the opportunity to build their empire on top of the rubble.
Mike Ashley and Philip Day are remarkably similar in a lot of ways. They are both worth over £1 billion, they are self-made entrepreneurs from unprivileged backgrounds, and they are both fast becoming the new kings of the high street.
Perhaps the most import similarity is their method in doing so; by buying up embattled retailers at a rock bottom price and using their considerable resources to return them to profitability.
This method has so far proved immensely successful for the pair, and the current state of retail is bound to provide more low hanging fruit.
Its little surprise that the pair were both contenders to acquire House of Fraser, the recently collapsed yet iconic department store chain.
With Day owning Days Department Stores and Ashley already owning an 11 per cent share in House of Fraser and a further 30 in Debenhams, the addition of one of the UK’s most well-established department store estates to their respective portfolios was a natural move for both.
But just who are these two new high street powerhouses, and how much of the UK’s retail market do they currently have a stake in?
The 53-year-old billionaire was born in the West Midlands, and began to build his empire in 1982 just two years after leaving school at 16.
He is now ranked number 629 on Forbe’s 2018 rich list and is thought to have a net worth of around £3 billion.
A keen sports player throughout his school life, Ashley launched Mike Ashley Sports in 1982. After growing his retail operation in the early eighties as a young entrepreneur, he opened his first store in London in 1984.
In 1995 he rebranded his chain as Sports Soccer, after securing significant private funding and growing to over 100 stores across the UK.
After officially becoming a limited liability company in 1999, Ashley began buying up sportswear brands and shares in rival retailers, a tactic referred to as “parking his tank on the front lawn” which he is now renowned for.
In 2003 he made his first major purchase buying the sports brand Dunlop Slazenger for £40 million, followed by outdoor goods manufacturer Karrimor a month later.
This was trailed by the acquisition of Kangol and Lonsdale, largely buying at low prices from distressed sellers.
As the acquisitions continued, Ashley took his company public in 2007, netting nearly £1 billion in doing so.
In recent years the once media shy Ashley has been forced to face the press amid numerous media storms relating to working conditions, pay and boozy business meetings.
The extent of Ashley’s empire is tricky to pin down accurately, as he uses numerous holding companies to buy up shareholdings in rival companies. He is registered as a director in over 200 companies.
His main business Sports Direct is 57 per cent owned by Mash Holdings, which holds the vast majority of his assets, including Newcastle United which he bought for £135 million.
Alongside the brands he owns including Slazenger, Everlast, Lonsdale, Karrimor, Kangol, No Fear, MuddyFox, Lillywhites, LA Gear, Gelert, Title, Crafted, SoulCal, Voodoo Dolls and Firetrap, Ashley has amassed a huge portfolio of shareholdings and ownerships.
These includes full control of Flannels. A 30 per cent stake in Debenhams, a 26 per cent stake in Game, and 30 per cent stake in Findel, a 27 per cent stake in French Connection, and a five per cent stake in MySale, who also counts Sir Philip Green as a shareholder.
He owns a stake in Agent Provocateur, he did own a 19 per cent stake in Finish Line which he subsiquently sold when it was purchased by rival JD Sports earlier this year. He owns a 9 per cent stake in Iconix Brands, which owns brands including Ed Hardy and Lee Cooper, and a near 20 per cent stake in Goals Soccer Centres.
As of earlier this month he also owns all of the UK stores of House of Fraser, the brand and all of the stock in the business.
Part II will be published next week, looking into Edinburgh Woollen Mill’s Philip Day.