// Mike Ashley refuses to put a number on potential store closures but said “realistically, it’s months, not years”
// Sports Direct renames itself Frasers Group after shareholder approval yesterday
// Ashley reveals plans for £100m staff bonus
Mike Ashley has warned that more store closures were on the horizon for House of Fraser within “months” unless the government changes the current business rates system.
Speaking at an investors’ meeting after announcing Sports Direct’s half year results yesterday, Ashley said “we cannot keep loss-making stores open”.
“All we want to do is pay what the correct rateable value is from the last set of valuations,” he said, added that the new year would bring more House of Fraser closures as some stores were paying nothing in rent yet were still unprofitable.
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“If the government doesn’t act soon, the Frasers Group will have to make a move forward.”
Ashley was adamant to avoid putting a number on the stores that would shut.
“To get stuck on store numbers is extremely dangerous,” he said.
“It’s the sort of thing I’d do in the past, and if I’d said I would [elevate] 50 stores and only did 49 then somehow I’d completely failed.”
When asked about a time frame for the closures, he said: “Realistically, it’s months, not years.”
The Sports Direct boss described the business rates system as “broken and unworkable”, and that the current charges were “clearly helping to kill much of what remains of the UK high street”, with large stores coming under pressure.
“It was, and it is only through the incredible efforts of those within the Sports Direct group, including the remaining House of Fraser teams, that we are tackling these problems and trying to build a business with a future – a future for Frasers that is hopefully ‘bright’,” Ashley told investors.
Sports Direct changed its name to Frasers Group after shareholder voted in approval at yesterday’s meeting.
Chairman David Daly said the strategy of “elevating” the group was working.
Frasers Group plans to open five to 10 new stores for its luxury Flannels fascia during the current financial year.
“We are hoping that the political waters will be calmer in the coming months, which will allow us to move out of this period of market unpredictability,” Daly said.
Ashley also revealed new plans for a £100 million bonus scheme for full time employees, excluding the board and anyone on zero hours contracts.
“We want to take people on the journey with us,” he said.
“It’s blue-sky but what we’d like to do is have a £100m pot . . . we’d probably like to see 50 millionaires and 500 people get a hundred grand each,” Ashley said.
“Nobody on the board will be included in that. I will not be included in it. I won’t be getting one penny of this.”
Shares rose 30.6 per cent on Monday after Sports Direct’s trading update, up to £4.70.