Mike Ashley businesses take over 3% of all non-food retail spend
A new report has unveiled the extent of millionaire Mike Ashley’s grip on the UK retail market, with his growing group of brands attracting 3.2% of all retail spending on non-food products.
The British retail entrepreneur founded Sports Direct - one of the UK’s largest sporting goods group - in Maidenhead in 1982 and has made his money by buying dozens of brands from distressed sellers.
Designer fashion retailer Flannels, fitness label Everlast and American Golf are some of Mike Ashley’s businesses. Most recently, he acquired House of Fraser out of administration, and is said to considering a takeover of struggling music and entertainment retailer HMV.
This growing portfolio will enable him to achieve economies of scale in terms of supply chain, allowing for bigger purchases and therefore improving gross margins, a report from GlobalData, published by Retail Insight, said.
Complementary retailers and brands can also benefit by leveraging their synergies, for example with Flannels stocking some of House of Fraser’s premium brands or Evans Cycles opening concessions within Sports Direct stores.
But the mix of brands could also become a problem - even more so amid the challenges facing UK retailers over the past year. Low consumer confidence and changing consumer behaviour have had a major impact on many British retailers, including New Look, Mothercare, Debenhams and House of Fraser.
As for the department store chain, Mike Ashley has focused mainly on renegotiating rents with landlords since acquiring it in August. The retailer’s product offering seems to be largely unchanged, and its stores have been left looking empty and neglected. Tellingly, over a third of HoF shoppers have put off shopping at the department store according to a survey conducted in September 2018.
Copyright © 2021 FashionNetwork.com All rights reserved.