Monday 2 May 2022 The Guardian •Financial^29
Sarah ButlerD
ressed in a T-shirt and
casual sweater with
a tan and slicked-
back hair, Michael
Murray is joking with
the camera crew
as he fi lms a clip for social media
surrounded by fl oor-to-ceiling glass
walls in the London headquarters
of Frasers Group.
As the 32-year-old former
nightclub promoter takes the reins
at the retail business that owns
Sports Direct, House of Fraser and
Flannels this week, there could not
be a clearer indication of the change
of image at the top of the company
founded by Murray’s father-in-law
to be, Mike Ashley.
Ashley, Frasers’ controlling
shareholder, who will remain an
executive director on the board,
has a diffi cult relationship with the
media, rarely giving interviews or
holding press conferences. Clearly
uncomfortable in the spotlight,
he runs Frasers as a quasi-private
company under the thumb of his
now 67% stake.
In contrast, Murray posts
updates on social media, such as
pictures of a meeting with Hugo
Boss executives in Germany
last month, and gives detailed
interviews with the press, outlining
his thoughts on the business’s
strategic direction. Eschewing
the company’s cut-price heritage,
he spent millions on a new
central London headquarters and
fl agship for the luxury Flannels
chain and funded glossy ads for
Sports Direct featuring celebrity
athletes, including the footballer
Jack Grealish and the tennis star
Emma Raducanu.
In his latest LinkedIn profi le,
Murray announces plans to
“accelerate the group’s strategy”
with a vision “to serve ourcustomers with the world’s best
sports, premium and luxury
brands”.
Having collected more than
£33m in payouts over the past four
years under a controversial scheme
linked to the value he created from
a string of property deals, Murray
will certainly be incentivised to do
well. He is in line for a £100m bonus
if he more than doubles Frasers’
share price to £15 by 2025.
The new pay deal underlines
a meteoric rise for Murray, who
began by helping Ashley with
personal property deals a few years
after meeting his daughter Anna on
holiday in 2011.
His career kicked off with the
festivals and student nights he ran
while still at Reading University
after attending the Sedbergh
private school in Cumbria. No
doubt inspired by his father,
a property developer who is
Doncaster’s biggest landlord, he
also invested in two bars while still
a student.
Working as a consultant to
Frasers, Murray has had an
important role in building Flannels
from a small regional brand into a
chain of about 50 stores. Those who
have dealt with Murray describe
him as bright with a polished
manner and clear ideas about how
Frasers should move forward.
“He’s a more acceptable version
of Mike Ashley,” says one former
worker. “He’s charming and quitemeasured, and knows what he’s
about. But this is a very big gig
for him.”
Another says Murray’s eff orts are
more about improving the surface
image to appeal to brands rather
than the world for workers behind
the scenes. “Removing Mike Ashley
is just an image thing. [Murray]
is almost like a mini Mike, an
apprentice. My perception was he is
never calling the shots, just the one
doing the grunt work.”
Whoever is truly setting the
strategy, Frasers has a battle on
to keep brands such as Nike and
Adidas happy without profi ts
tanking at a time when shoppers’
spare cash is potentially in short
supply as the cost of goods, energy
and transport rises.
Most Sports Direct stores
still require updating. There are
also serious challenges to tackle
at House of Fraser, the ailingdepartment store Ashley snapped
up in 2018, which requires big
investment or more hacking back.
The chain has already shrunk to
fewer than 40 outlets from 59 on
acquisition, and industry insiders
say investment is on hold with
more stores likely to be converted
to Flannels or shelved.
In a tight labour market, Frasers
has a way to go to improve its
image as an employer after years
of concern about low pay and
accusations of maltreatment
of staff in stores and at its huge
warehouse in Shirebrook,
Derbyshire. Murray is also taking
over at a time when investors
have never been more concerned
about corporate, social and
environmental issues.
“He has got to be a force for
[environmental, social and
governance] improvement or
he will fi nd the pool of investors
will shrink. It is in everybody’s
interest to focus on that,” says
Jonathan Pritchard , a retail analyst
at Peel Hunt.
A change in culture will require
some tricky political manoeuvring
to keep the benefi t of Ashley’s
undoubted retail expertise within a
more modern environment.
Pritchard says: “[Murray] has to
demonstrate he can make strategic
decisions of his own. I’ve no
doubt he can but he has to cut the
puppet strings without sacking the
puppeteer.”‘A mini Mike’
Ashley legacy
looms large
as new boss
takes charge
at Frasers
Michael
Murray, the
new head of
Frasers Group,
which owns
Sports Direct
PHOTOGRAPH:
FRASERS/REUTERSIf pay tracked
dividends
‘wages would
be up £4,000’
Richard Partington
Economics correspondentWorkers in Britain would be paid
£4,000 a year more on average
if wages had matched a boom in
company dividends handed to share-
holders over the past two decades,
according to a report.
Highlighting a gulf between
earnings from work and company
ownership, the Common Wealth
thinktank said far-reaching reforms
were needed to rebalance power
amid growing inequality.
With wages failing to keep pace
with the soaring cost of living, it urged
the government to increase workers’
rights and trade union negotiating
strength, while increasing social care
funding and social security benefi ts.
It comes as ministers face grow-
ing pressure for a windfall tax on
energy producers amid the cost of
living crisis. After a surge in whole-
sale oil and gas prices in the wake
of Russia’s invasion of Ukraine, the
energy companies Shell and BP are
expected to report sharp rises in prof-
its this week. Separately, Common
Wealth showed the two businesses
channelled £147bn to shareholders
over the past decade.
The business secretary , Kwasi
Kwarteng , has lobbied against a
windfall tax, writing to energy com-
panies at the weekend urging them to
increase investment to prevent more
drastic action by the cabinet.
The shadow climate change sec-
retary, Ed Miliband, said: “Kwasi
Kwarteng’s letter is not worth the
paper it is written on for millions of
families facing the cost of living cri-
sis. Families want action to deal with
the bills crisis, not a vacuous, insult-
ing piece of political spin .”
Common Wealth, in a May Day
intervention alongside other progres-
sive thinktanks, including Autonomy,
the Centre for Local Economic Strate-
gies and the Women’s Budget Group,
said big companies were enjoying
booming profi ts while ordinary peo-
ple experienced an unprecedented
assault on their economic security.
Using Offi ce for National Statis-
tics fi gures, it found total labour
compensation for UK households
grew by 25% between 2000 and 2019
after taking account of infl ation and
growth in the working age popula-
tion. Over the same period, dividend
payments by UK-based private corpo-
rations increased by 132%.
Common Wealth said if the ratio
between wages and dividends had
stayed the same over the past two
decades, earnings from work would
have been 18% higher, or £4,000
annually per working age person.
Mathew Lawrence, the founder
and director of Common Wealth ,
said: “We can create an economy
where working people have a much
greater share in the wealth they
create. ”Jonathan Pritchard
Peel Hunt retail analyst‘[Murray] has to
demonstrate he
can make strategic
decisions of his own.
He has to cut the
puppet strings’