Mike Ashley’s Frasers keeps profit outlook as ‘elevation strategy’ pays off

Frasers, the sportswear and apparel retailer that owns the Sports Direct brand, said it was on track to meet full-year profit guidance after first-half earnings rose 12.6 per cent, reflecting the success of a plan to take the group upmarket.

The FTSE 100-listed group controlled by Mike Ashley said on Thursday it was confident of achieving adjusted pretax profit of £500 million (€583 million) to £550 million in the year to April 2024, up from £478 million a year before.

It made £303.8 million in its first half to October 29 on revenue that rose 4.4 per cent to £2.77 billion.

The group is pursuing a so-called “elevation strategy” with investments in flagship stores and in online operations, and the deepening of ties with brands such as Nike and Adidas.

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Frasers' brands also include House of Fraser, Flannels, USC and Jack Wills, and it holds strategic equity stakes in a raft of other retailers including Hugo Boss, ASOS, Boohoo, Currys and AO World.

Industry data published on Tuesday showed British retail sales growth remained sluggish in November despite Black Friday deals as the ongoing cost-of-living squeeze prompted shoppers to rein in spending on non-essential items.

However, Frasers said its strong trading momentum had continued into the early weeks of its second half, especially at Sports Direct.

“The elevation strategy continues to drive strong trading performance across the business,” said CEO Michael Murray, Ashley's son-in-law.

He said Frasers' long-term ambitions for its Premium Lifestyle business were unchanged, although he cautioned that progress was likely to remain subdued for the short to medium term in the face of a softer luxury market.

Shares in Frasers, 73 per cent of which are owned by Ashley, are up 28 per cent in 2023. – Reuters

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