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Ashley first for using sport; BUSINESS OF SPORT Peter Sharkey on the 'private man' who has made the most money from sport.

Byline: Peter Sharkey

In a world where 'personalities' of varying quality and questionable taste are increasingly prominent, getting on with the job and keeping a low profile would no longer appear to be a smart career option.

Nowadays, profile equates with status' there really is 'no such thing as bad publicity'.

So when someone considered to be one of the richest men in sport suggests he is "a private man running a private business," one wonders whether such words are uttered with a sense of false modesty.

Could it be Roman Abramovich, benevolent Chelsea owner, whose money comes from oil, gas, steel and who knows where else? Maybe a low-ish profile billionaire football club owner with a penchant for self-effacement?

It's actually none of the above' indeed, it could be argued that very few, if any, modern-day sports magnates actually make their money from sport per se.

Rather, they accumulate their pile elsewhere and dabble in sport afterwards, which makes this 'private man running a private business' even more intriguing because he has made his wealth directly from sport.

Step forward 42-year-old Mike Ashley, owner of brands such as Dunlop Slazenger, Lillywhites, Donnay International, Karrimor, Kangol and Lonsdale, as well as the jewel in his sporting crown, the increasingly ubiquitous Sports World chain of retail outlets. According to some estimates, Ashley's net worth is pushing pounds 2.5 billion, much of which has come from selling Nike and adidas goods, among others, at knockdown prices.

Ashley broke cover recently and, in a carefully-scripted press conference, revealed that he may need more funds to expand his burgeoning empire across the globe. Sports World already has a presence in Ireland, Belgium and Slovenia but he has bigger plans. "I think this business could be so, so much bigger and on a global stage," he said.

Earlier this year, he recruited investment bankers Merrill Lynch, ostensibly to advise upon his strategic options, one of which is a stock market float. But several dissenting City voices question whether such a valuation actually stacks up.

Sports World's last accounts, to 24 April 2005, revealed a 44 per cent increase in profits, to pounds 74.4 million, on sales of pounds 905 million.

The profits included a one-off gain after the company sold the rights to the Slazenger Golf name in Europe for pounds 10 million. Following tax, Sports World made a profit of pounds 57.4 million.

Ashley also turns businesses around. He bought sports retailer Lillywhites for pounds 11.5 million in 2002.

For several years, this genteel group was best known for its iconic London store, founded in 1863, but the year before Sports World snapped it up Lillywhites lost more than pounds 6.5 million on sales of only pounds 30 million. Following Ashley's acquisition, in March 2002, Lillywhites underwent a radical transformation. By April of last year Lillywhites' profits exceeded pounds 3 million.

Sports World has riden a 'sportswear and fashion' wave and capitalised on the seemingly ceaseless demand for replica football shirts. But is the company worth pounds 2.5 billion?

Henry Shattock, of investment analysts HBFS Associates, said: "Mike Ashley has been enormously successful and deserves great credit for the way in which he has developed his business but I would question whether it would be valued at pounds 2.5 billion in its current guise."

Shattock invites comparison with other established retailers, suggesting that "for a retailer new to the stock market, I would expect it to be valued at around 16 times earnings."

In other words, for Sports World to be valued at pounds 2.5 billion, it would need to be making net profits of between pounds 150-pounds 160 million, which is about three times more than its latest published accounts indicate - and they included a one-off gain.

Ashley supporters point out that 2006 profits will be close to pounds 90 million and that following Sports World's recent acquisitions (of Kangol and Streetwise), these could be expected to grow by a further 25 per cent by April 2007.

Even given Henry Shat-tock's broad stock market valuation rule, this would make the Sports World empire worth pounds 1.8 billion.

Be it pounds 1.8bn or pounds 2.5bn, Ashley has built his business while maintaining a low profile' he does not seek media attention, nor pass comment on a myriad of unrelated subjects, he simply gets on with his job.

Few would bet against Sports World being valued beyond pounds 2.5 billion, making it the most valuable pure quoted sports business on the market.

Ashley has no need to start mouthing off like some of his sports business peers.


The richest man in sport? not Roman Abramovich but publicity-shy Mike Ashley
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Title Annotation:Sport
Publication:The Birmingham Post (England)
Date:Dec 23, 2006
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