Mike Ashley Gambles Big Time At The Euros
Thanks to England’s progress in the Euros, Mike Ashley’s retail group is up 1.5p at 304.5p with the expectation it could shift more replica shirts now the team has reached the quarter finals, plus the extra bonus of avoiding Spain.
Jonathan Pritchard at Oriel Securities said that Mike Ashley’s company had bought stock on the gamble that England would progress further than the group stage of the competition:
Management must be used to watching England games through latticed fingers but the outcome was the right one last night, helpfully with England’s talisman scoring the winner.
Sports Direct has been aggressive on pricing replica shirts, moving from half price, to two for £40 to £20 each now. Meanwhile the blue away shirt has been retailing at a mere £15. Sports Direct is using the tournament to emphasise its value credentials, making life very difficult for the competition and shouting value at its customers at a time when money is tight but treats/celebrations are welcome.
With the Olympics around the corner, this is a golden opportunity for Sports Direct to endear itself to sporting customers, and the long-term philosophy of reinvesting strong sales growth back into gross margin is absolutely intact. Our like for like assumption for the first half is an impressive 8% and even that may prove too low.
It appears that Newcastle United’s owner can do no wrong at the moment and England certainly carried the luck last night to come out top of their group.
Add this to his budget based retail empire unsurprisingly booming in these times of austerity and Newcastle producing an excellent fifth place last season.
I bet even (or is that especially?) Mike Ashley will be smiling if his £35m windfall (Andy Carroll) nods the winner in the final to bring the trophy home.
The way Ashley’s luck is at the moment, I wouldn’t be betting against it.
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