Frasers' boss says Mike Ashley doesn't 'get' Flannels, but is very supportive
If anyone is surprised about the ongoing success of the upscale Flannels chain against a backdrop of a cost-of-living crisis, Fraser Group’s CEO Michael Murray said it has succeeded by riding “the wave of new aspirational shopping”, despite that crisis.
And Murray’s father-in-law, former boss, company founder and majority Frasers shareholder Mike Ashley, is among those confused by its success. He thinks the Flannels concept is “bonkers”, Murray told the BBC in an interview.
Murray elaborated: "He can't understand why people would spend so much on luxury clothing. But he understands that he doesn'tunderstand, and he understands you have to be relevant to consumers,” he said of the retail entrepreneur whose built a massive fortune on being keenly attuned to just what consumers want.
“He understands when he sees the results. It's quite remarkable what we've done,” Murray added.
A year after taking over as CEO, Murray said he’s reinventing the company his way, targeting "new luxury, aspirational" customers, via the fast-growing 60 Flannels UK stores.
In its last set of results, Frasers Group's ‘premium lifestyle’ brands saw revenues of just over £530 million in the six months to the end of last October, up nearly 25% on the year, with Flannels the key driver.
Murray said its target market is 18-30-year-olds, who aspire to expensive products after exposure on social media, noted Murray.
“Many are still living at home, so have been sheltered from rising interest rates, rents or high energy bills. They like to spend their disposable income on health, fitness and clothing.”
He also said he’d like his legacy to be “the transformation [of the business] from a discount sports retailer to Europe's biggest, most aspirational retailer.”
But Murray admitted that Flannels doesn’t have the mega potential ofthe group’s core brand Sports Direct, which is expanding internationally, including into Asia.
Sports retail at Frasers — with Sports Direct at the centre — turns over around three times as much revenue as the premium lifestyle arm, though it’s growth is slower.
Murray also said Ashley remains involved in the business of which he was formerly CEO: “Mike's an expert operator. We call him 'The Mechanic' - he looks after the warehouse, the supply chain, he's optimising that engine. He's making sure the back-end system and the logistics keep up with the front end. That's what he spends his day and night thinking about.”
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