Clash of the retail titans: Old rivals set for new face-off as Mike Ashley takes stake in Aussie fashion firm backed by Sir Philip Green
They are two of the biggest names in the rag trade – but in recent years they have not seen eye to eye.
And now Mike Ashley and Sir Philip Green have been reunited as shareholders of Mysale – thrusting the AIM-listed minnow firmly into the spotlight.
Ashley has snapped up a 28.7 per cent stake in the little-known Australian online fashion firm through his Frasers Group empire that owns everything from House of Fraser and Sports Direct to Agent Provocateur and Lonsdale.
Fallout: Mike Ashley, left, and Sir Philip Green, right, have been reunited as shareholders of Mysale – thrusting the AIM-listed minnow firmly into the spotlight
That makes Ashley Mysale’s biggest shareholder – ahead of Green who owns 16 per cent through his wife’s offshore vehicle Shelton Capital Management.
A friend of Green said the tycoon had no idea what Ashley was planning.
‘Ashley doesn’t know what he’s doing,’ the source said. ‘He wakes up and picks a letter out of the alphabet and that’s the game plan for that day.’
For years, Ashley saw Green as his mentor. But when the tracksuit tycoon began outgrowing Green, their cosy relationship turned sour. It is thought Green scuppered Ashley’s 2019 attempt to take over collapsed music retailer HMV and they have not spoken since.
The falling out marked a dramatic end to a relationship, which had seen Green take the Sports Direct founder under his wing as he expanded his empire from a single store in Maidenhead.
Green introduced Ashley to bankers and investors in the run up to Sports Direct’s stock market listing in 2007. And the two were friends, with Ashley attending many of Green’s lavish birthday parties.
They even went in on deals together, including buying into the flash-sale specialist Mysale when it joined the London Stock Exchange in 2014. At the time, Green picked up a 22 per cent stake through Shelton Capital, while Ashley bought 4.8 per cent.
Mysale shares floated at 226p, with Green’s stake worth £85million and Ashley’s worth £15million.
But the stock tanked and Ashley sold up for around £518,000 while Green held on, despite his holding being almost totally wiped out.
In the years since, the two have publicly sparred, with Ashley saying in 2019 he would not even buy Green’s Arcadia fashion empire ‘for a pound’.
Green lashed out at a later attempt by Ashley to buy Topshop in a rescue bid as a ‘publicity stunt’.
Mike Ashley’s expanding empire
The purchase of a stake in Mysale marked yet another expansion of Mike Ashley’s ever-growing retail empire.
The 57-year-old, who went on to own Newcastle United FC, set up Sports Direct as a single store in Maidenhead 40 years ago in 1982.
Now called Frasers Group – after the rescue of House of Fraser after it crashed into administration in 2018 – the £3billion company owns or has stakes in at least 39 retailers or brands.
The swoop on Mysale is the third significant investment by Frasers since Ashley handed the reins to his son-in-law Michael Murray, 32, the group’s chief executive.
Frasers recently upped its stake in German luxury fashion brand Hugo Boss to 30.9 per cent and this month plucked fast-fashion seller Missguided out of administration for £20million.
The deals have led many to believe Ashley is still in the driving seat at Frasers, despite Murray’s insistence his father-in-law is ‘not pulling the strings’. Ashley is still chairman of Frasers and majority owner with a 65 per cent stake.
Frasers said the stake-building ‘creates an opportunity for a strategic partnership’ which will help it counter the seasonal swings between Europe and Asia.
But one analyst said Ashley’s investment style is like a ‘high stakes gambler’, adding that the move looks less strategic and more like a bet.
But yesterday’s decision by Frasers to buy back into Mysale as its biggest shareholder brings the pair back together.
Frasers said it bought the stake to create ‘an opportunity for a strategic partnership’ that will allow it to offload its excess European stock on the cheap through Mysale’s websites in Australia and New Zealand.
A source familiar with the business said Ashley picked up the shares for 2p each, a 43 per cent premium to their trading price.
Ashley is believed to have bought the stake from Mysale’s second and third biggest shareholders, asset managers Lombard and Schroder.
Retail analyst Richard Hyman, at consultancy TPC, said: ‘The relationship between Philip and Mike Ashley has always been rather up and down.
But would Mike Ashley be a buddy of Philip? No, I don’t think he would.’ Shore Capital retail analyst Clive Black said: ‘Mike Ashley is canny, entrepreneurial and is someone to be genuinely respected as a businessman.’
Green, thought to be worth £910million, has kept a low profile since the collapse of BHS which caused 11,000 job losses and left a £571million hole in its retirement scheme before the tycoon plugged the gap.
Ashley, said to be worth £3billion, recently handed the reins of Frasers to his son-in-law Michael Murray, who married Ashley’s daughter Anna in May. While Murray is officially chief executive, many believe Ashley is pulling the strings.
And no doubt it will be Ashley rather than Murray who Green has his eye on when it comes to Mysale.