The headline in the Financial Times provoked more than a double-take. “Mike Ashley is the plain-speaking business hero we need.”
Mike Ashley, the bully boy behind pile it high, flog it cheap sports gear, serial user of zero hours contracts, and hate figure to a large portion of the Newcastle United faithful for his refusal to spend heavily. That Mike Ashley.
Has the FT taken leave of its senses? The same title that exposed the scandal of the macho bad behaviour surrounding the Presidents Club dinner now praising the business boss who vomited into a fireplace after consuming 12 pints in a pub during a management meeting?
Actually, the FT is right. The source of the applause was the memo Ashley sent to the Debenhams board, expressing anger at their refusal of a £40m interest-free loan and equity injection from his Sports Direct chain, the department store group’s biggest shareholder.
In no uncertain terms, Ashley maps out the lie of the land for the Debenhams directors. It’s not pretty: “November was the worst November for retailers in living memory; the market is saying Debenhams has no credit insurance; advisers and banks are telling suppliers they should not trade with the firm at a level above which they can afford to lose; suppliers are managing themselves out of stores; product is being discounted to try and realise some cash.” And, says Ashley, with a final flourish: “Additionally, it is speculated that the company currently has a zero chance of survival.”
Phew. That’s telling them. And that’s the point. Because too few senior business people tell it how it is, for fear of provoking upset and spoiling relationships. Too many of their advisers seek to please, not help.
The result is that they carry on existing in a bubble. Decisions that should be taken aren’t, boards do not confront reality, and instead, carry on their sweet way. Opportunities to act, to do something, are lost, with the result that when the C-suite does decide to move it’s often too late.
For injecting a dose of reality into proceedings, and, hopefully, making the Debenhams top brass sit up and see sense, Ashley deserves much credit. At the very least, they cannot maintain they were not made aware.
His straight-talking is commendable and authoritative – Ashley, don’t forget, is immersed in retail, and is grappling on a daily basis with the same landscape that is confronting Debenhams.
It’s Ashley as well, as the head of an empire that along with Sports Direct includes lingerie firm Agent Provocateur, Evans Cycles, luxury fashion chain Flannels, the House of Fraser department stores, and major holdings in Debenhams and French Connection, who is warning loudly about the dire future facing the high street. Rising rents and growing popularity of online shopping paint a bleak prospect, one that he says could be improved by a tax on firms who generate 20 per cent of their revenues from the internet.
It would be disastrous if the time-honoured establishment reaction to the likes of Ashley, of labelling him as an upstart, as someone not to be taken seriously, was pursued
As with Debenhams, Ashley does not pull his punches, telling MPs, the high street is heading for extinction unless radical action was taken and warning them: “I’m not Father Christmas.”
I never imagined I’d write this: we need more Mike Ashleys. Not the bad boy Ashley, but the one who is prepared to speak out, to stand up and to be counted.
What’s striking is just how few major retailers are prepared to voice their fears and frustrations. We’re entering a season of renewed woe in the industry, of yet more dismal sets of results and closures – but the silence, the sense of inertia, will be resounding.
In private, they’re all complaining and moaning like mad. But, hidebound by conservatism, afraid of rocking the boat, of drawing attention to themselves and somehow being seen as in trouble, they’re saying very little in public.
The result is that it’s not just the directors of Debenhams who are able to kid themselves, but trade associations, industry organisations, MPs, media, councils, landlords, trade unions. They, along with the retailers, should all be campaigning to save our high streets, highlighting the imbalance between digital and bricks and mortar, pointing up the ridiculous nature of the business rates system, stating categorically that thousands of jobs are going to perish – not to mention the knock-on effects to communities.
There’s a bit of noise, but it’s scattergun, and nowhere near concerted or loud enough. The fact it’s fallen to Ashley to say something, speaks volumes.
All credit to him, though. Of course he’s got a vested interest, as he has in Debenhams. But if he does not protest, who will? Hopefully, the directors of Debenhams will wake up, along with the MPs he was addressing.
It would be disastrous if the time-honoured establishment reaction to the likes of Ashley, of labelling him as an upstart, as someone not to be taken seriously, was pursued. The time for retreating into the bunker, and hoping the danger will pass, has gone. The Debenhams board must act, and act now. Likewise, where the broader state of the high street is concerned, we need action and we need it now.
Mike Ashley, a saviour. Who would have thought it?
Chris Blackhurst is a former editor of The Independent, and director of C|T|F Partners, the campaigns, strategic, crisis and reputational, communications advisory firm