Dressed in a T-shirt and casual sweater with a tan and slicked back hair, Michael Murray is joking with the camera crew as he films a clip for social media surrounded by floor-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 difficult relationship with the media, rarely giving interviews or holding press conferences.
Before floating Sports Direct in 2007, he was so reclusive that the only photograph of him available was from the 1970s, when he was a county squash coach. Since then, Ashley has appeared in front of MPs and fronted annual presentations to analysts and the media, but is clearly uncomfortable in the spotlight and runs Frasers as a quasi private company under the thumb of his now 67% stake.
In contrast, Murray posts updates on the business 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, Murray spent millions of pounds on a new central London headquarters and flagship for the luxury Flannels chain and funded glossy ads for Sports Direct featuring celebrity athletes, including tennis champ Emma Raducanu and footballer Jack Grealish.
In his latest LinkedIn profile, Murray announces plans to “accelerate the group’s strategy” with a vision “to serve our customers with the world’s best sports, premium and luxury brands”.
Murray, who has collected more than £33m in payouts over the last four years under a controversial pay scheme linked to the value he created from a string of property deals, 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 running festivals and student nights while still at Reading University after attending 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 quite measured, and knows what he’s about. But this is a very big gig for him.”
Another says Murray’s efforts are more about improving the surface image in a way that will 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 profits tanking. With shoppers’ spare cash potentially in short supply and inflation on pay, the cost of goods and transport, it could prove an uphill task.
Most Sports Direct stores still require updating while there are also serious challenges to tackle at House of Fraser, the ailing department store Ashley snapped up in 2018 that requires big investment or more hacking back.
The chain has already shrunk to less 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. Its diminishing scale makes the rationale for recent acquisitions of ailing brands – which could be useful in a mid-market department store such as Jack Wills and Sofa.com – look like rather expensive diversions.
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 Shirebrook warehouse. As well as attracting and retaining talent, it must deal with investors that have never been more concerned about environmental, social and governance (ESG) issues.
“He has got to be a force for ESG improvement or he will find 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.
Murray has certainly attempted to turn around Frasers’ image on staff relations, with a generous bonus scheme for 1,000 top staff – albeit with the rather stretching target of the group’s share price staying above £10 for 30 consecutive days in the next four years. The last time it came close to that was in 2014.
Bringing about a real change in culture will require some tricky political manoeuvring to keep the benefit 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.”
