Appointment of Chief Executive Officer = no surprise!

[barca72 440]

Here's an interesting piece on how Ashley operates, lifted from Ozblue's post on RM.

If he fully acquires Rangers we will still be a very small piece of change to him. However, it still seems to me he would want Rangers to be successful. I don't think he has time for losers.

 

By Neil Maidment

LONDON (Reuters) - "If you don't want to play, we'll come to your country and smash you to bits," Mike Ashley, the billionaire founder of British retailer Sports Direct said earlier this year.

That's not the language you'd expect from a business leader laying out plans to expand across Europe.

But from a man who turned a 10,000 pound loan from his parents into Britain's biggest sporting goods chain -- buying a football club and stakes in major competitors along the way -- it is not to be taken lightly.

Ashley, and many analysts, believe Sports Direct's model of cut-price offers on top brands such as Nike and Adidas, subsidised by high-margin sales of own-brands including Dunlop and Slazenger, can be replicated across continental Europe.

That could spell bad news for the big sporting goods chains there, such as France's Decathlon.

"Sports Direct is incredibly focussed on the European story," Trevor Green, head of UK institutional funds at Aviva Investors, the company's sixth-biggest shareholder, told Reuters.

Ashley's unconventional style -- he's usually dressed in jeans and a white shirt and makes clear his reluctance to explain his decisions -- has unsurprisingly attracted critics: Not least in 2007, when Sports Direct shares floated at 300 pence apiece, netting Ashley around 900 million pounds, only to plunge to 31 pence less than two years later.

The stock has since bounced back to more than double its debut price, however, far outperforming the UK benchmark FTSE-100 index <.FTSE>, and helping to win over many doubters.

"In terms of retail, he's got control of that sector in his own way, in his own style ... and clearly proven that he's done a very good job of it," Topshop owner Philip Green, Ashley's equally abrasive entrepreneurial friend, told Reuters.

 

"TOTALLY UNCONVENTIONAL"

 

It currently has a near 12 percent holding in its main British rival JD Sports , as well as investments in departments stores House of Fraser and Debenhams, online retailer MySale, and even Britain's biggest retailer Tesco.

Having seen off competitors such as the once-mighty JJB Sports in Britain, Sports Direct now has 434 stores at home, as well as 270 more in 19 countries across mainland Europe.

But it lacks the scale to take on a pan-European industry about eight times the size of Britain's 5-6 billion pounds a year sporting goods market, and has said it could do takeovers.

Analysts have tipped Dutch rival USG and Exisport in Slovakia as potential targets.

"TOTALLY UNCONVENTIONAL"

Ashley's not just interested in acquisitions, though. The 50-year-old, who owns English soccer club Newcastle United despite the misgivings of many fans, has a track record of using Sports Direct to take stakes in rivals -- a move that blurs the lines between strategic investor and activist hedge fund.

"For a public company it's totally unconventional, and that's what he is," said a banker familiar with Ashley, whose 57.7 percent Sports Direct stake is worth 2.3 billion pounds.

"But if you invest in this business you should go in with your eyes open. If investors complain -- well I'm sorry, but Mike Ashley was there when you bought the shares."

Over the years, Sports Direct has held stakes in companies such as Finland's Amer Sports, JJB Sports, kit maker Umbro, and Adidas -- the latter two raising its profile with two key suppliers, before being sold for big profits.

It currently has a near 12 percent holding in its main British rival JD Sports , as well as investments in departments stores House of Fraser and Debenhams, online retailer MySale, and even Britain's biggest retailer Tesco.

Sometimes it's because Ashley has seen an opportunity to make money, and sometimes it's because he hopes to influence or cooperate with a rival. But usually it's all of these.

In January, for example, Sports Direct sold a stake in Debenhams it had bought days earlier, making a profit of about 4.6 million pounds. It then replaced that with derivatives deals which tie up less capital but still give it an influence.

Since then, Sports Direct has opened four concessions in Debenhams stores, securing a platform to sell top-end products of key brands such as Adidas, Nike and Puma that are unlikely to be distributed to its own shops until later.

"In the majority of cases over the years we have found that taking those stakes has helped rather than hindered the developing of a relationship and that's why we do them," Sports Direct chief executive Dave Forsey told Reuters.

"I don't want to take any credit for the visions that come along, primarily they will be ones that he (Ashley) has spent time puzzling out," added Forsey, who joined Sports Direct as a Saturday boy in 1984 and now oversees the day-to-day running of the business, while Ashley focuses on strategy.

At Tesco, where Sports Direct has a 0.3 percent interest via another derivatives deal, it leases unused space in 11 UK stores as well as eight in mainland Europe and four in Malaysia.

It has done the same with furniture chain IKEA in central Europe, and more such deals could be on the cards, with big European retailers such as Germany's Metro and France's Carrefour looking to address underused space.

Not all of Ashley's bets have paid off. In 2008, he was reported to have personally lost up to 300 million pounds by backing shares in HBOS before the British bank collapsed.

But that hasn't deterred him.

"It's about putting shops down in a few places and seeing who wants to play ... That's the message we'll be putting out in Europe," Ashley told analysts in July. And if rivals don't want to play, they can't say they haven't been warned.

[The Real PapaBear 0]

See, I'm not saying that he is not here for making money. But it would surprise me not if he's also here to add something to his ego that he could not and most likely will not do with the Magpies.

 

I have a hard time believing that his ego would be massaged by winning a piss-poor league or a cup n a country at the arse end of Europe, whose football is as unappetising as its food. The only way that your supposition would make sense would be if he was happy to be a minor Champions League / major Uefa Cup player - but for either of those, he would have to invest scores of millions of pounds just in the short term - and that I just don't see happening.

 

Of course, I may be wrong. Let's hope so.

Edited December 20, 2014 by The Real PapaBear

[forlanssister 3,114]

See, I'm not saying that he is not here for making money. But it would surprise me not if he's also here to add something to his ego that he could not and most likely will not do with the Magpies.

 

@Rangersitis ... I read that stuff from FS, interesting as it was. Once I see that in figures on an SD balance sheet et al and not as a theory on a fan board, I might be convinced. No disrespect to FS whatsoever. Meanwhile, I'm still of the opinion that Ashley and SD are hardly satisfied by the way their Rangers business is going on.

 

I know from previous experience that you don't believe a word I type, but hey the Sports Direct balance sheet doesn't f*&king interest me in slightest however the Rangers one most certainly does, you may wish to ponder on that if he pulls the plug on RTV.

 

However it really is as simple as he'll do whatever is in Sports Direct's interests and to hell with any consequences for us, he most certainly won't risk damage to Sports Direct's balance sheet by investing what's necessary to restore the Club to it's right full place.

 

Since you won't believe me take note of Ashley's own words which should give you insight to his modus operadi.

 

Mike Ashley shuffled in his seat, rubbed his chin, and paused as he pondered his first question from a reporter, possibly ever.

 

Being charitable, you might say the Newcastle United owner and billionaire was thinking carefully.

 

Others might have concluded he was squirming in his deputy chairman seat at the Sports Direct AGM on Wednesday afternoon.

 

The pause, the embarrassing silence, lasted 27 awkward seconds.

 

Fellow board members glanced his way, concerned. But none of his executives jumped in to bail him out.

 

Was he going to walk out of his own AGM, or stay and do what he loathes the most... speak to a journalist?

 

There was no possibility of a quick banning order, like some reporters have suffered at St James’ Park. No chance to negotiate a cash for questions deal, the likes of which he has tried to strike with newspapers for access to interviews with the Magpies' players.

 

Reluctantly Ashley, wearing a Sports Direct polo shirt and jeans among the FTSE 100 suits, spoke.

 

He said: “Other than to say that it’s been beneficial to Sports Direct and therefore its shareholders, I don’t think it’s appropriate to comment.”

 

It was a start.

 

These were his first words on Newcastle United since a 1,600 word written statement following relegation in 2009.

 

I’ve tried to talk to him in the past. First at a pre-season friendly in Majorca in 2008, when he was ushered away. The second time was last year, also in Auditorium D of Sports Direct’s 1 million square metre HQ on Shirebrook, but questions were blocked to non shareholders.

 

This time, I was armed with a magical shareholders’ yellow card, ensuring rights to question the board, and of course, Ashley.

 

This was unusual territory for Ashley, one of the most enigmatic, private, publicity-shunning, successful figures in business.

 

He’s built up Sports Direct from one shop to 24,000 employees and a £2.7 billion turnover. With his spare cash he bought Newcastle, for £134million and gave a £129m interest free loan, while turning it into a profitable club.

 

He’s also bought into Scottish giants Rangers, who are desperate for cash.

 

Newcastle fans, and supporters of Rangers, where he has a 10 per cent stake and secured the naming rights to Ibrox for £1, want questions answered.

 

Like, 'Why do Sports Direct not pay Newcastle United for the dozens of their adverts around St James’ Park?' And, 'How much would that advertising worth if it was sold to another company?'

 

Ashley’s response?

 

“I think I summed it all up in my previous statement. Those relationships are very beneficial to Sports Direct and its shareholders. And I think that nothing else needs to be said.”

 

Will Ibrox be renamed the Sports Direct Arena, like St James’ Park was temporarily?

 

“I’ll only answer the same answer that I answered before,” said Ashley.

At one point, Chair Keith Hellawell intervened: “This is really isn’t for the Annual General Meeting of this company. I think in relation to what Manchester United, sorry Newcastle United, and Rangers gain, you’d have to ask them. There’s no-one from the board of those companies here.”

 

Actually, as was then pointed out, there was a board member available... Mike Ashley, the owner.

 

MirrorFootball: “We are talking about a massive company and two of the largest football clubs in Britain. It’s an interesting relationship that’s being forged. As I shareholder I’m exploring the relationship between two very large football institutions and Sports Direct, a very large and successful company. That’s why I’m asking these questions...

 

Hellawell: “I do understand that and I understand your frustration. Please accept we’re trying to be as helpful as we can...”

 

Some detail eventually came from an aide when the AGM has finished.

 

Newcastle’s retail arm, which has been taken over by Sports Direct is worth £3.4m of business the company. That’s £3.4m off Newcastle’s turnover, including whatever profit it brings.

 

Rangers retail business, now in the hands of Sports Direct, is worth £3.8m in turnover.

 

So Ashley has, at last, faced some questions. But more answers are needed to satisfy the supporters of Newcastle and Rangers..

 

Transcript of exchanges between Mike Ashley and reporters at Sports Direct's AGM, regarding Newcastle and Rangers

Q: "I’d like to address a question to Mr Ashley, please. I wonder if he could explain the benefits to Sports Direct in its relationship with Newcastle United and Rangers."

 

Pause of 27 seconds

 

A: “Other than to say than it's been beneficial to Sports Direct and therefore its shareholders, I don't think it’s appropriate to comment.”

 

Q: "Newcastle have said publicly, for example, that Sports Direct don’t pay for any stadium advertising or perimeter advertising at St James' Park - and there’s obviously a lot of it - and I wonder what the benefit is to you and whether you could give a rough estimate of what it’s worth in financial terms please."

 

A: “I think I summed it all up in my previous statement. Those relationships are very beneficial to Sports Direct and its shareholders. And I think that nothing else needs to be said."

 

Q “With due respect, can I then reverse the question? What is the benefit to the relationship they have with Sports Direct for Newcastle United, in which you are the owner, and Rangers, in which you have a shareholding? What is the benefit to those institutions?"

 

Keith Hallawell intervenes:

 

“This is really… That isn’t for the Annual General Meeting of this company. The first question was, in relation to what benefit the company gain from that. I think in relation to what Manchester United, sorry Newcastle United, and Rangers gain, you’d have to ask them. There’s no-one from the board of those companies here. It’s not to do with this company."

 

Q: "Well, there is one member on the board (Ashley)."

 

Another director: “Yes, but this is a Sports Direct annual general meeting."

 

Q: “I know. I’m aware of that. I was just correcting that error. Can I direct a question to Mr Ashley? Sports Direct now process and profit from the shirt sales and merchandising through Newcastle United, the website and the club shop. Can you explain how much this trade is worth? Is it a significant part of the business to Sports Direct and do you, Newcastle, share in that profit?

 

Ashley: “I’ll only answer the same answer as I gave before."

 

Q. "Okay. A follow-up question. A Rangers director stated last week that Mr Ashley had bought the naming rights to Ibrox two years ago for £1. First question, is this true? Second question, St James’ Park was once named Sports Direct Arena and the suggestion is the same could happen to Ibrox. Could he comment on that?

 

A: “I’ll only answer the same answer that I answered before.”

 

Q: “Okay, thank you."

 

Hellawell: “We are really straying beyond the AGM. We’re trying to be helpful."

 

Q: "I would just say the questions are relevant to resolution one in the company accounts and how the company accounts are being boosted by Sports Direct’s very close relationship with Newcastle United and Rangers. That's why we’re exploring this issue."

 

Hellawell: "I think you used the word ‘significant’ didn’t you?"

 

Q: “So are you saying that’s an insignificant relationship between the two?"

 

Hellawell: “If you read the company’s accounts, you can perhaps realise the size of the company and the size of that contribution. That’s all I’ll say."

 

Q: "Perhaps I can ask a follow up? Does Mr Ashley have any plans to increase his shareholding in Rangers to the possible benefit of Sports Direct and its shareholders?"

 

Answer indistinguishable.

 

Q: "We are talking about a massive company and two of the largest football clubs in Britain. It’s an interesting relationship that's being forged. As I shareholder I’m exploring the relationship between two very large football institutions and Sports Direct, a very large and successful company. That’s why I’m asking these questions.

 

Hellawell: “I do understand that and I understand your frustration. Please accept we’re trying to be as helpful as we can, but those are not issues for the Sports Direct board. I think you need to take those up with Newcastle and with… I mean, Mike is an individual but as part of this corporate board now, it’s really not something we can answer."

 

Q: "One not related to football: Tesco, Sainsbury and Morrisons are among the companies who say they don’t use zero hour contracts. Should Sports Direct follow their lead?"

 

A: “I think I’ve answered that in terms of not being able to talk about our employment policy, other than to say we hold them in the highest regard and believe the success of this company is largely based on the contribution they’ve made and we will look out for them as best we can."

 

http://www.mirror.co.uk/sport/football/news/after-five-years-silence-newcastle-4197405

 

Sports Direct's current P/E ration is 22.24 ergo every pound he gets out of Newcastle or Rangers is worth £22.24 to the Sports Direct share price and £12 to Ashley it really is that simple it's not rocket science.

[der Berliner 3,743]

I know from previous experience that you don't believe a word I type, but ...

 

I reserve my judgement on what most people write, you included. As does anyone else, I suppose. If I come to different - or let's say not the very same - conclusions as you do does not by default mean that I don't believe you. Not that I said that quite a few times before.

 

I've read these comments of the SD AGM (or whatever it was) before, likewise your P/E ratio explanation. Doesn't change what I wrote in the reply above.

Edited December 20, 2014 by der Berliner

[Rangersitis 0]

Here's an interesting piece on how Ashley operates, lifted from Ozblue's post on RM.

 

If he fully acquires Rangers we will still be a very small piece of change to him. However, it still seems to me he would want Rangers to be successful. I don't think he has time for losers.

 

If Sports Direct are making money from it, that will be good enough for him. How many more times will this "Rangers need to be successful" horseshit be trotted out? As has been shown recently, quite a few folk have got rich without having to worry about on-field matters.

[buster. 5,184]

Forlansister

Q: "I’d like to address a question to Mr Ashley, please. I wonder if he could explain the benefits to Sports Direct in its relationship with Newcastle United and Rangers."

 

Pause of 27 seconds

 

A: “Other than to say than it's been beneficial to Sports Direct and therefore its shareholders, I don't think it’s appropriate to comment.”

 

That is the only quote I can find where Ashely addresses his involvment with Rangers.

However those few words say everthing say so much.

Edited December 20, 2014 by buster.

[jhunter 0]

If Sports Direct are making money from it, that will be good enough for him. How many more times will this "Rangers need to be successful" horseshit be trotted out? As has been shown recently, quite a few folk have got rich without having to worry about on-field matters.

 

its a security blanket for the hard of thinking.

[SteveC 150]

its a security blanket for the hard of thinking.

 

It's also what most people I talk to believe. Fans of English clubs, most non-forum Rangers fans, it's what I hear on the media, it's what I hear from many ex players. Any Newcastle fan pointing out the truth is treated as though he is the delusional one.

 

Madness rules this shitty world

[Rangersitis 0]

its a security blanket for the hard of thinking.

 

Agreed, but it is also pushed by those who have no problem with thinking logically on other subjects. That appears to be more calculated.

[trublusince1982 243]

SD make more from Rangers than they do Newcastle?

 

Newcastle’s retail arm, which has been taken over by Sports Direct is worth £3.4m of business the company. That’s £3.4m off Newcastle’s turnover, including whatever profit it brings.

 

Rangers retail business, now in the hands of Sports Direct, is worth £3.8m in turnover.

 

edit add quote

Edited December 20, 2014 by trublusince1982