Mike Ashley's new venture

[Wacky Racer]

http://www.thisismoney.co.uk/money/news/article-31...

[AyBee]

He certainly knows his market and seems to do the business model well...

[Rowley Birkin]

Well I am certainly looking forward to seeing one of these on our local high street.

[Simpo Two]

Woolworths suddenly seems quite classy.

The only step lower than 'MegaValue' is 'CheapstForChavs'.

[R8Steve]

You wonder why he bothers with some of his risky ventures sometimes. He certainly knows how to make money and i have no doubt he will make it a success but I often wonder how he finds the time and what is the end game for him? He's already worth billions after all!

[AyBee]

Simpo Two said:

Woolworths suddenly seems quite classy.

The only step lower than 'MegaValue' is 'CheapstForChavs'.

I'd say they were equivalent

[Andrew[MG]]

R8Steve said:

You wonder why he bothers with some of his risky ventures sometimes. He certainly knows how to make money and i have no doubt he will make it a success but I often wonder how he finds the time and what is the end game for him? He's already worth billions after all!

If he makes more money then maybe he can buy some decent football teams?

[Frimley111R]

anonymous said:

[redacted]

Agreed. People that successful and driven won't just sit back on their millions. Reminds me a bit of Wall St 2 where Gecko admits its not about the money, its about winning that drives him.

[AyBee]

Andrew[MG] said:

R8Steve said:

You wonder why he bothers with some of his risky ventures sometimes. He certainly knows how to make money and i have no doubt he will make it a success but I often wonder how he finds the time and what is the end game for him? He's already worth billions after all!

If he makes more money then maybe he can buy some decent football teams?

And yet he's one of the few in the Premiership who treats the club as a business and not something to waste your b/millions on and actually does reasonably well out of it.

[malks222]

you have to love his business model tho:

sell branded stuff at break even prices
sell own brand stuff with huge profit

eg: go to sports direct buy a nike tshirt (he breaks even after o/h) but suddenly realise you need some socks and a water bottle, buy donnay/wilson/whatever just because your there its competitively priced and easy and he makes 1000% or whatever markup he's got.

I just wonder how much better he would do with better look shops, logo, store layout etc.... I do go there if I need stuff, but hate the layout and having to trawl through hundreds of crap to get to what i need. or is that all part of his master plan??

[R8Steve]

Andrew[MG] said:

R8Steve said:

You wonder why he bothers with some of his risky ventures sometimes. He certainly knows how to make money and i have no doubt he will make it a success but I often wonder how he finds the time and what is the end game for him? He's already worth billions after all!

If he makes more money then maybe he can buy some decent football teams?

Doubt it, he could buy any premiership team he wanted with the money he has.

Agree about the money no longer being the end game and the thrill of the chase being what he is all about. He must be a better man than me then as i'd quite happily cash in and never look at another business for the rest of my life at about 1% of his net worth!

[Wacky Racer]

R8Steve said:

Andrew[MG] said:

R8Steve said:

You wonder why he bothers with some of his risky ventures sometimes. He certainly knows how to make money and i have no doubt he will make it a success but I often wonder how he finds the time and what is the end game for him? He's already worth billions after all!

If he makes more money then maybe he can buy some decent football teams?

Doubt it, he could buy any premiership team he wanted with the money he has.

Agree about the money no longer being the end game and the thrill of the chase being what he is all about. He must be a better man than me then as i'd quite happily cash in and never look at another business for the rest of my life at about 1% of his net worth!

Not done too bad from one small shop in Maidenhead when he was a teenager......

Interviewed here:-

https://www.youtube.com/watch?v=ougRi9NRM8k

[basherX]

The audit firm I trained at had picked him up as a client when he set up his first shop (in Maidenhead, as above) and he stayed with them for audit until he listed which was shortly after I left. During the three or so years I was there we did a lot of work for him and my time coincided with him popping up in the Sunday Times rich list for the first time so there was a lot of interest. My last year I led the audit and I'll always be grateful for the experience- took me into a good career.

He's always the brightest guy in the room, he loves doing deals and he doesn't suffer fools. He's got a simple business model and he executes well. And now he has scale he can basically please himself.

[jonamv8]

Unless you're NUFC then fair play to him

[Undirection]

I like stories about successful people, I find it very motivational.

[Thankyou4calling]

malks222 said:

you have to love his business model tho:

sell branded stuff at break even prices
sell own brand stuff with huge profit

eg: go to sports direct buy a nike tshirt (he breaks even after o/h) but suddenly realise you need some socks and a water bottle, buy donnay/wilson/whatever just because your there its competitively priced and easy and he makes 1000% or whatever markup he's got.

I just wonder how much better he would do with better look shops, logo, store layout etc.... I do go there if I need stuff, but hate the layout and having to trawl through hundreds of crap to get to what i need. or is that all part of his master plan??

You seem to have a very good insight into Sports Direct profit margins.

How do you come by this?

[R8Steve]

Thankyou4calling said:

malks222 said:

you have to love his business model tho:

sell branded stuff at break even prices
sell own brand stuff with huge profit

eg: go to sports direct buy a nike tshirt (he breaks even after o/h) but suddenly realise you need some socks and a water bottle, buy donnay/wilson/whatever just because your there its competitively priced and easy and he makes 1000% or whatever markup he's got.

I just wonder how much better he would do with better look shops, logo, store layout etc.... I do go there if I need stuff, but hate the layout and having to trawl through hundreds of crap to get to what i need. or is that all part of his master plan??

You seem to have a very good insight into Sports Direct profit margins.

How do you come by this?

It's well publicised that his business model involves what malks said above.

[The Moose]

What they'll do is buy stuff in non-standard sizes - i.e. batteries with 7 in a pack, not 8 as per normal where it's almost impossible to find the same elsewhere/they tie up the whole supply chain for that product line/exclusivity agreement.

[Wacky Racer]

Thankyou4calling said:

malks222 said:

you have to love his business model tho:

sell branded stuff at break even prices
sell own brand stuff with huge profit

eg: go to sports direct buy a nike tshirt (he breaks even after o/h) but suddenly realise you need some socks and a water bottle, buy donnay/wilson/whatever just because your there its competitively priced and easy and he makes 1000% or whatever markup he's got.

I just wonder how much better he would do with better look shops, logo, store layout etc.... I do go there if I need stuff, but hate the layout and having to trawl through hundreds of crap to get to what i need. or is that all part of his master plan??

You seem to have a very good insight into Sports Direct profit margins.

How do you come by this?

Obviously malks was generalising, but I think it's fair to say when Sports Direct sell a Lonsdale top for £24.99, you would get a shock if you knew have much they come out of third world countries for....not a lot.

But that probably applies to stuff from Primark, Matalan, TK Maxx....etc.

If the general public didn't think they were "worth" £24.99 they wouldn't buy (or nick) them.....

For all his faults, Mike Ashley is a retail genius, I remember very well when he opened his first shop, around the same time as David Makin and John Wardle at JD Sports........DM was seventeen at the time.

Sports Direct have virtually wiped the independent sports trade out in the UK over the last ten years, (with a few exceptions), and family owned chains that had thirty or forty branches, he just bought them out, effectively giving himself a virtual monopoly.....Dave Whelan at DW Sports is making a late comeback bid, but is miles behind, so is concentrating on his Gyms, but also Ashley is moving into that market too, with a cut price business model.

In his book Whelan says he regrets not crushing Ashley, when he only had a handful of shops, although much of credit for Sports Direct's rise should go to his right hand man Dave Forsey, who effectively runs the day to day business.

It will be very interesting to see where Mega Value are in five years time, but my guess is MA won't find it as easy as he thinks, but I wouldn't bet against him.

[basherX]

Wacky Racer said:

In his book Whelan says he regrets not crushing Ashley, when he only had a handful of shops, although much of credit for Sports Direct's rise should go to his right hand man Dave Forsey, who effectively runs the day to day business.

Forsey is a good guy and from humble beginnings he's put in place a world class retailer. ISTR he started in the Maidenhead shop, or at least early on.

The relationship with Whelan is the interesting sub-plot to the whole thing. After the whole "there's a club in the North, son, and you're not part of it" (or whatever the words were) and the subsequent Ashley complaint to the OFT it was obvious that Ashley was at least partly in the business of putting Whelan out of business. There are many reasons JJB folded but Sports Soccer/Direct is the biggest. And it wasn't a surprise when Ashley took the brand and the corporate head office as well as many of the stores.