As Mike Ashley’s retail empire predicts sales boom, MPs demand he hands back furlough cash
Billionaire Mike Ashley was last night urged by MPs and campaigners to hand back tens of millions of pounds of furlough cash to taxpayers after his retail empire predicted a surge in sales.
Frasers Group – formerly called Sports Direct – placed 18,000 staff on furlough as the lockdown forced it to shut down its shops in late March.
But yesterday it revealed it has made an annual profit of more than £143m, said business has returned to a ‘semblance of normality’, and predicted earnings could soar by almost a third this year.
Laughing all the way to the bank: Mike Ashley has been urged by MPs and campaigners to hand back tens of millions of pounds of furlough cash to taxpayers
Despite this, it refused to pledge to hand back the millions it has claimed from the Government’s Job Retention Scheme.
The retailer also refused to commit to forfeiting up to £18m in ‘job retention bonuses’.
It will become eligible for these taxpayer handouts if it keeps on staff who were previously furloughed for three months after the Job Retention Scheme shuts down at the end of October.
Budget retailer Primark, bookmaker William Hill and housebuilder Barratt have been among those to declare they will not be claiming these bonuses, which are worth £1,000, for each furloughed employee.
A string of firms have also committed to handing back taxpayer support for furloughed staff after their business has bounced back.
But asked if Frasers intended to follow suit, finance chief Chris Wootton told Radio 4: ‘We’ll keep [the furlough bonus] under review, and all these schemes under review. We feel we’ve been a very good corporate citizen.’
Wootton pointed out that the firm – which is 63.5 per cent owned by Ashley – had topped up the salaries of furloughed staff to 100 per cent and handed out £25m of discounts to NHS staff.
Darren Jones, chairman of the Commons’ business committee, said: ‘There have been examples of good businesses who took taxpayers money and gave it back, that’s what we would expect. I’m afraid it’s the Government’s fault for not putting conditions on this at the start.’ Bridget Phillipson, Shadow Chief Secretary to the Treasury: ‘Public money needs to be properly targeted at the businesses and sectors that need it most, to save jobs and livelihoods, and protect our high streets.
‘It should not be used to bolster billionaires’ coffers.’
Frasers’ reluctance to give back furlough cash is in stark contrast to William Hill, which promised to return £24.5m earlier this month.
Housebuilders Barratt, Taylor Wimpey and Redrow, and retailers such as Asos, Ikea, Games Workshop and Dr Martens have also vowed to return money to HM Revenue & Customs.
Jeremy Hutton, of the Tax Payers’ Alliance, said: ‘Taxpayers will likely remember those that helped in the national effort and those that didn’t.’
Frasers, which owns Evans Cycles and Jack Wills, revealed its profits slid by a fifth to £143.5m in the year to April 26. But sales jumped almost 7 per cent to £3.9billion, and bosses predicted it would grow its underlying earnings by 10 per cent to 30 per cent in the year to April 2021. The business warned more stores will close after ‘the most challenging year in the history of the company’, but said a ‘semblance of normality’ had now returned in day-to-day trading.
The group closed 74 more stores than it opened in the year to April 26, its accounts said.
Bosses said more closures will follow as it spends £100m on ‘an enhanced customer experience’ for online shoppers.
They also issued a fresh threat to landlords across its 1,530 stores, saying more closures will come if they refuse to agree to drastic rent cuts.