Yahoo Finance Mike Ashley to invest £600m in new Coventry HQ after buying stadium
Mike Ashley’s Frasers Group is investing £600m on a new headquarters in Coventry after buying the city’s Coventry Building Society (CBS) Arena.
The owner of Sports Direct, Jack Wills and House of Fraser said it has “huge" ambitions to grow its business with Coventry a key focus.
Michael Murray, chief executive of Frasers and Mr Ashley's son-in-law, said: “Relocating and future-proofing our capabilities is very important. Coventry is very well placed [considering] where our store estate is.”
Mr Ashley bought the CBS Arena last month after former owners Wasps Rugby Club went into administration.
Frasers’ lease on its current HQ, in Derbyshire, expires in 2034. Mr Murray stressed Frasers was committed to its existing site and was in the process of kitting it out with new technology.
The new site will not be at the stadium itself but a separate location on the outskirts of the city.
Work on it is yet to commence, with the business waiting on planning permission. The £600m figure would likely change with the cost of technology and building materials, Mr Murray added, calling it “a figure in the air”.
It comes as sales at the retail giant grew 12.7pc over the six months to October 23, hitting £2.6bn.
However, that top line growth was due to its acquisitions of new businesses. Excluding acquisitions, its sales were up 3.9pc.
Frasers blamed a drop (excluding acquisitions) in its sports retail division largely on a poor performance by its video games retailer Game.
It was “no secret” gaming sales were going online and as a result Game stores were being closed, said Mr Murray, adding Game’s performance had been hit by the lack of a big console release this year.
Its premium lifestyle division, however, which includes luxury fashion brand Flannels and Jack Wills rose by a quarter (24.7pc) to £533.5m.
Mr Murray said ramping up partnerships with bigger and more upmarket brands was helping to lure younger shoppers despite the cost of living crisis.
He said: “These brands are so desirable and they’re so attractive to that younger consumer segment that they are must-have products which they buy into."
He added that working more collaboratively with clothing and style brands on marketing and advertising “builds trust and shows to the consumer we can sell higher price point products”.
Shares in Frasers fell as the company unveiled its results on Thursday morning.
Mr Murray said: “We’re one of the very few retailers which is actually up over the course of the year. I’ve not looked into it too much. I’m not sure people have had time to digest the numbers.”
He said the business had decided not to upgrade its forecast due to the ongoing economic turbulence buffeting the UK. He added: “I don’t think the current macroeconomic outlook justifies doing any upgrading at this stage.”
