The new CEO at Sports Direct has warned that the retailer could need to increase prices because of expenses that are “going over the top”.
Michael Murray has taken over the role of Mike Ashley – his future father-in-law as the chief executive officer of Frasers Group.
In his first interview for the job , he told BBC Mr. Ashley was “not in charge”.
He also emphasized on the fact that High Street is not dead and plans are in place to open 10 flagship stores in the UK.
At 32 at the age of 32, Mr. Murray is now one of the most youthful chief executives of FTSE 250 companies after a rapid climb up the ranks of one of largest UK retailers.
However, he’s facing a difficult time due to increasing costs and a pressure on family incomes.
Even though Sports Direct stores pride themselves on their many deals and special offers but Mr. Murray acknowledged that prices are likely to increase.
“In regards to the price of our products, we are extremely dependent on the pricing of our partners in the industry,” the CEO said.
“They choose the price they wish to offer the product at and we’ll raise the price if and when the brands request us to do so or advise us to increase the price.”
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Talking to the BBC in advance of Sports Direct opening its new Birmingham store on Friday the 26th of March, Mr Murray stated that he was convinced the UK’s High Streets were not “dead” however he said they will be “different”.
“I believe that if you give people a reason to visit and shop, they’ll shop. It’s just that they haven’t had a motive for the last few months,” he added.
On 4 floors of Birmingham’s brand new Sports Direct looks like a modern department store that caters to sport and fitness. It’s an entirely different experience from traditional retail stores. It features an E-sports gaming area as well as a fitting service, and Evans Cycles and a Game concession.
“It’s worth over PS10m. It’s an enormous expense for the High Street,” Mr Murray stated.
He said that Mr. Ashley was an “genius that was his age” However, he added that it required “different kind of genius and a different thinking that propels us to”the next generation”.
“What I’d like to do is build upon the excellence in retail that Mike has built over the last 40 years, and create an organization that’s ready to last for the future 40 years to come,” he said.
“It’s actually as easy as it gets.”
The London’s Oxford Street store was the first store to get a new design Sports Direct unveiled last year and Mr. Murray claimed that there was the potential for up to 10 of the regionalstores that are experiential and local.
It’s a huge chance to bet on the future for High Streets. High Street.
But, it’s not solely about enticing customers to buy. One of Mr. Murray’s most difficult problems is convincing his two major brand names, Nike and Adidas, to offer the best-loved tracksuits and trainers.
The journey that, as he said that it’s going “very very well”.
“If we’d made this happen in the past five or six years, it would’ve been a totally different shop because you would not have the merchandise to add to this,” he said.
Mr Murray is engaged to the Ashley’s youngest daughter is leading efforts to modernize the business in an effort to attract younger customers.
Prior to his appointment as the chief executive, he was not an employee at Sports Direct, nor did the company have a seat in the company’s board.
He made millions in consulting fees relating to numerous deals on properties he negotiated for the company.
Mr Murray dismissed claims that he was only able to get the job because of his connections to the former Newcastle United owner Mr Ashley who founded Sports Direct in 1982 and remains the majority shareholder of the company’s empire that also includes House of Frasers, Flannels and Jack Wills.
“I’ve clearly proven that I am worthy and valuable to the team. I’m convinced that we’ve accomplished many things in the past few years. Mike would never ever consider putting me in a position that he didn’t think I’d be able to excel at because I’m not sure it would be well-liked around the table.” Mr. Murray declared.
Is Mr. Ashley still playing the strings?
“No Mike is not pulling the strings,” said Mr Murray.
“We’ve collaborated as a team that was very cooperative for the last two or three years. There are heated discussions. We are in agreement, but we do not agree. The final decision rests in my hands on the result of the business.
“I’m certainly my own man.”
He promised to clarify the business and said the company was “misunderstood and perhaps having more of a scattered gun style approach over the years”.