Smile wiped off face of Mike Ashley as rival forges ahead
Mike Ashley looks to be now counting the cost of his actions in recent years.
Adopting a ruthless and maverick approach to running both Newcastle United and his wider business empire looked to be a winning formula, at least financially.
Refusing to allow the club to properly invest in Newcastle’s squad for a number of transfer windows saw initial (financial) success for the owner, as the club remained in the Premier League regardless.
However, that failure to invest eventually caught up with Mike Ashley and NUFC, leading the club’s owner to then belatedly splash the cash to try and retrieve the situation after near relegation in 2014/15.
Only for the failing transfer policy of young inexperienced future profit players from overseas, to bring about another calamitous relegation last season (2015/16).
In his Sports Direct retail empire, Ashley is also paying the price for some business decisions which have proved a negative longer-term.
The whole business model has been called into question and a tide of bad publicity has followed, with Mike Ashley forced to appear in front of MPs and justify the running of Sports Direct.
Back in 2011, Mike Ashley had said:
“I’ll finish off JJB (Sports) first and then I’ll move on to JD (Sports).”
JJB Sports collapsed in 2012 but…
JD Sports has been a different kettle of fish for Mr Ashley.
Having already overtaken Sports Direct in terms of valuation, the latest JD Sports financial figures have left Mike Ashley and SD trailing in their wake.
The JD Sports revenues increased from £1.8bn to £2.3bn when announced this morning.
Pre-tax profits jumped by 55%, with profits of £246m up to the 28 January.
After the figures were released earlier on Tuesday, shares in JD Sports surged by almost 13%, the share price having risen by over 40% in the year to date.
This all means that JD Sports is now valued (market capitalisation) at £4.3bn, whilst Sports Direct is left well behind with a value of £1.7bn.
While Sports Direct and Mike Ashley have repeatedly made negative headlines for the way they operate with regard to staff, shareholders and customers, JD Sports have flourished by targeting younger, more style-conscious customers. Trading on quality rather than perceived bargains….
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