LONDON: Michael Murray isn’t taking a salary to run Frasers Group Plc, but the prospect of a £100mil (RM540mil) bonus if he doubles the share price of the British retailer is incentive enough.
The 33-year-old, who became chief executive officer last year, will receive the bumper award if shares of the owner of the Sports Direct chain reach £15 (RM81) and stay at or above that level for 30 straight days by October 2025. The price is currently less than half of that level, showing the scale of the challenge
“If I wasn’t motivated to hit the £15 share price I maybe shouldn’t be here,” Murray said in an interview at the new Sports Direct store in Manchester, England.
The five-story Manchester flagship – which boasts big, bright spaces and an array of global brands, from Nike to Adidas and Under Armour – is a showpiece in Murray’s effort to elevate the retail empire of his father-in-law, Mike Ashley.
Murray aims to refurbish the “vast majority” of Sports Direct’s more than 470 stores by 2028, even as sky-high inflation makes the revamp more costly.
His appointment as CEO marked a distinct shift for a company once pilloried in a parliamentary report for its treatment of warehouse employees and whose founder had an acrimonious relationship with the City, media and even the government, initially defying an order by then Prime Minister Boris Johnson to shut non-essential stores early in the pandemic.Once viewed as merely the boyfriend of Ashley’s daughter, Murray is now seen as the executive best able to lift Sports Direct beyond its long-standing pile-it-high and sell-it-cheap approach.
The company has its sights on a bigger share of a more sophisticated European sportswear market that’s forecast to grow above 5% a year to 106bil (RM505bil) by 2026, according to GlobalData.
The strategy is showing signs of progress. Frasers reported its highest profits ever last year and forecast another record of at least £450mil (RM2.4bil) this year.
On two occasions in the past 12 months the stock approached £10 (RM54), the threshold at which workers could share a separate £100mil (RM541mil) bonus pool.
Murray, who embraces social media, comes across as more measured than Ashley, who once made headlines for calling on the board of retailer Debenhams to take lie-detector tests.One of the youngest CEOs in the FTSE 100, Murray epitomises the fitness-first, aspirational lifestyle of the customers Frasers is trying to woo.
He never misses his 7am workout and, on a tour of the Manchester store, carried a bottle of water to stay hydrated.
Frasers said last year that Murray would waive his £1mil (RM5.4mil) base salary for this financial year, which ends in April.
Ashley, who is 58, stepped down from the board last year, months after handing over the CEO role, but still owns about 70% of the company. As such, he will always be the final decision maker at Frasers, said Tony Shiret, a retail analyst at Panmure Gordon.
Yet the mercurial founder isn’t as hands-on as some might expect, giving Murray some room to act, he added.
“With Mike, the key thing has always been that he has to trust you,” said Shiret.
“Either you’re with him or you’re against him. Clearly, he trusts Michael Murray and he’s made a good start.”
Murray grew up in Doncaster, northern England, and as a teenager organised parties for other under-18s.
He went on to run an events business before following in his property-developer father’s footsteps, advising Frasers on its retail real estate. Before becoming CEO, Murray spent about three years as head of elevation at Frasers, studying each part of the business.He married Ashley’s daughter Anna last year at Blenheim Palace, a grand country house in southern England, and they have two children.
The Sports Direct upgrade isn’t the only transformation he’s overseeing. Murray is opening new Flannels stores carrying luxury brands such as Gucci and Dolce & Gabbana, including a seven-floor outlet in Liverpool last year. — Bloomberg
