Michael Murray, CEO of Frasers Group, has robustly dismissed what he termed “nonsense rumours” suggesting that retail brands are unwilling to partner with the acquisitive conglomerate. The comments follow Frasers Group's unexpected entry into the auction for luxury department store Harvey Nichols last week, a move that reportedly raised eyebrows among some of its brand partners. Frasers Group, which operates high-street staples like Sports Direct and Flannels, has a known track record for making assertive bids to gain control of rival companies.
Murray firmly rejected these claims, stating, “I just think that’s nonsense. It’s absolute nonsense. It’s just people making up rumours.” He emphasised the strength of Frasers Group’s existing brand relationships, highlighting their timely payment of bills and ongoing investment in their retail proposition, expansion, and growth. Murray further suggested that rival firms might be attempting to undermine Frasers, describing such comments as “nonsense” aimed at creating unfounded speculation.
The luxury retailer Harvey Nichols, headquartered in Knightsbridge, initiated discussions regarding a potential sale late last month. This decision came as the company struggled to maintain pace with competitors such as Selfridges and Harrods. Frasers Group, founded by billionaire Mike Ashley, has cultivated a reputation for making strategic plays for control, with past interests in companies including fashion retailer Boohoo and luxury bag maker Mulberry. The group also launched a €2 billion bid for Hugo Boss last month, and cited uncertainty surrounding this takeover approach as the reason for not providing investors with a profit forecast.
In its full-year results announced for the period ending April, Frasers Group reported a substantial 8% increase in revenue, reaching £5.3 billion. Pre-tax profit saw an even more significant jump, rising by 39% to £528 million. Despite these strong financial results, the company's shares experienced a 3% dip on Thursday, closing at 736p. However, the stock has demonstrated resilience, having gained 10% since the start of the year.
Beyond the company’s performance, Murray voiced strong concerns about the health of the UK high street, describing it as being in a “death spiral.” He attributed this decline to recent policy changes, including increases in National Insurance Contributions (NICs), minimum wages, and business rates. The group itself paid £260 million in business rates, corporation tax, and employer’s NICs in the year to April, an increase of £20 million from the previous year. Murray urged the incoming government, led by prospective Prime Minister Andy Burnham and likely Chancellor Shabana Mahmood, to reform the “archaic” business rates system and to create more opportunities for young people to enter the retail sector.