Mike Ashley hands out £100m in staff bonuses whilst warning more House of Frasers stores will close

house of Fraser

Mike Ashley yesterday revealed plans to hand £100 million to staff after his retail empire posted a rise in interim sales and profits, although he warned that losses at House of Fraser would lead to more shop closures.

Ashley started the group with a shop in Maidenhead in 1982. There are now 450 Sports Direct stores in the UK but the business has grown rapidly through acquisitions to 1,592 shops under brands including House of Fraser, the clothing groups Flannels and USC, Game Digital, the video game retailer, Evans Cycles and Bob’s Stores in the US.

The company yesterday rebranded to call itself Frasers, a move unexpectedly announced last month as part of efforts to “elevate” its reputation. There is only one Frasers store, in Glasgow, but there are plans to open a second luxury department store in Belfast next year.

Sean Nevitt, the commercial director, said that the group’s transformation was like going “from Donnay to Dolce” — a reference to the multipacks of socks that Sports Direct sells and the designer dresses in the Flannels branches.

Ashley said that the retailer must get used to “canoodling the luxury brands”. Frasers Group announced a 58 per cent rise in underlying pre-tax profits from £64.4 million to £101.8 million in the six months to September 27, while statutory profits rose 160 per cent to £193.4 million, boosted by a £120 million sale and leaseback deal of its company headquarters.

Group sales rose by 14 per cent to £2.04 billion, including House of Fraser and Flannels’ stores. The UK sports business increased sales by 6.7 per cent to £1.2 billion but, excluding acquisitions, sales fell by 8.6 per cent.

Shares in the company rose by 112¼p, or 31.2 per cent, to 472¼p, pushing it to £2.46 billion, its highest valuation in three years. Sports Direct reassured investors that it expected no material liability from the Belgian authorities after a £605 million demand in July.

Ashley said he “was not prepared to keep lossmaking stores open” after saying that some House of Fraser stores made no money despite paying no rent. He also criticised the business rates system, saying that it would “kill what remains of the high street”. He made a plea to Boris Johnson to scrap transitional relief so rates were based on the most recent property valuations.