Mike Ashley (businessman)

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For other people with the same name, see Mike Ashley.

Michael James Wallace Ashley (born 1963) is an English billionaire retail entrepreneur, in the sporting goods market. He is also the owner of Newcastle United after paying around £135 million to buy the club.

Ranked 25th in the 2007 version of the Sunday Times Rich List with estimated wealth of £1.9 billion, Ashley was seen as an intensely private person, who never attended industry functions or gives interviews. Philip Beresforde, who compiles the annual Sunday Times list, said neither he nor his staff have ever managed to contact Ashley, and describes him as "easily Britain's answer to the late Howard Hughes."^[1] However, since Sports Direct International Plc went public, and his purchase of Newcastle United where he has taken to sitting in the stands with fans, Ashley has taken on a more public and accessible persona.

Contents 1 Biography 1.1 Sports World International 1.2 Marketing tactics 1.3 Newcastle United 2 References

[edit] Biography

Ashley grew up in Burnham, Buckinghamshire, where his parents still live in a modest bungalow. He was educated at Burnham Grammar School.

[edit] Sports World International

After leaving school at 16, in the 1980s Ashley began opening Sport and Ski shops in and around London. The chain expanded quickly funded by private money, and by the late 1990s had rebranded the chain Sports Soccer and opened over 100 stores across the United Kingdom. As a sole trader and not having to file accounts at Companies House, little was known about him. The company became limited liability in 1999.^[2]

Nottinghamshire based group Sports Direct International Plc, with headquarters in Shirebrook, Mansfield has over 400 UK stores including the chains Sports World, Lillywhites (acquired in 2002), Gilesports and the Original Shoe Company. The group employs more than 20,000 people in the UK and at stores in Ireland, Belgium and Slovenia. In 2006 it over took JJB Sports as the UK's largest sports wear retailer.^[3] In mid-2006 it was also revealed that Ashley had held talks with John Hargreaves, founder of Matalan on both taking a 25% stake in the retail business and installing mezzanine floors in larger Matalan stores, on which Sports World outlets could be operated.^[4].

Ashley has made his money by buying brands. The first major brand he bought was Donnay. In February 2003 Ashley bought the Dunlop Slazenger brand for £40 million, followed up by acquiring outdoor gear manufacturer Karrimor in March 2003,^[5] Kangol for £10 million,^[6] boxing brand Lonsdale, most of these brands were bought from distressed sellers. After considering a takeover,^[7] Ashley took a £9 million stake and signed a long-term deal with Umbro.^[8]

Ashley has a 29.4% stake in Blacks Leisure, the owner of Millets and Mambo^[9], and is thought to hold stakes in JJB Sports and 19% of JD Sports.^[10] "He likes to park his tanks on peoples' lawns", said a banker ^[11].

In late November 2006, a number of business newspapers reported that Ashley was looking at an IPO of Sports World International. He hired Merrill Lynch^[12], who initially valued the group at up to £2.5bn ahead of the flotation on the London Stock Exchange ^[13]. Floated at 300p, the shares initially performed poorly, on sentiment surrounding the sports retail sector, complaints about poor investor relations management, and concerns that the group's close-to-the-wind sales practices, such as "closing down" sales at branches that don't actually close, would receive greater scrutiny now it is a listed company.

[edit] Marketing tactics

Often derided as a Tesco like "pile it high, sell it cheap" merchant after his transformation of the croquet-set loving Lillywhites. The chain will often use a Closing Down sales tactic, and re-open in another location soon afterwards using another one of its brands. Customers are also drawn into the store by almost margin-less promotions on perceived high-value brands like Nike trainers and Adidas tops, making money for Sports World when they also buy an own brand item marked up at a substantial margin.^[14] The use of the brands are an important part of the business model, with Ashley making £10m from selling the intellectual-property rights to the Slazenger Golf brand to arch-rival JJB in 2005.

[edit] Newcastle United

On 23 May 2007, Ashley bought Sir John Hall's 41.6% stake in Newcastle United at one pound per share, for a total cost of £55,342,223^[15] via his company St James Holdings Ltd. Under the terms of UK takeover law, having purchased more than 30% of a listed company, he was obliged to make an offer to buy the remaining shares at the same or a greater price.^[15] On 31 May it was reported that the Newcastle board were considering Ashley's offer.^[16]

On June 7, 2007 it was confirmed that chairman Freddy Shepherd had agreed to sell his 28% share to Ashley, which left Ashley free to take control of the club.^[17]

As of June 15, 2007, Ashley owned a 77.06% stake in Newcastle United and was on course to withdraw the club from the stock exchange having surpassed the 75% threshold required.^[18]

100% acquisition was achieved in July with Ashley paying a total of around £134 million to buy the club. Once he had control, he then went on to tackle the debt Newcastle had by funding a large sum of money from his own pocket to pay off almost half the debt. It was later revealed by Chris Mort (Newcastle Stand-In Chairman) that if this had not been done and Newcastle had not been bought they were very close to 'folding like a pack of cards'^[19]

Ashley also revealed why he wore the number 17 on his Newcastle United shirt at matches. He felt that recent signing and Newcastle squad player Alan Smith, who currently wears the number 17 shirt for the team, shows great passion and determination to do well and play for the club^{[citation needed]}. The wearing of this shirt has caused controversy due to the recently contested Tyne-Wear derby, with Sunderland AFC refusing to give Ashley permission to wear it in the Stadium of Light corporate box. On the 9 November 2007, the day before the game, it was announced on the clubs official website that Ashley would sit in the away end with the Newcastle United fans so he could wear the club's colours. The game ended in a 1-1 draw. At half time, stewards at the stadium stopped him from buying a pint of lager for every Newcastle fan in the away end^{[citation needed]}.

After increasing supporter unrest due to the negative tactics and style of play employed by Newcastle on the pitch, Ashley sacked manager Sam Allardyce on January 9th 2008.

On January 16 2008, Mike Ashley successfully negotiated the re-appointment of Kevin Keegan to Newcastle United.

[edit] References