Frasers Group has confirmed that it is planning a leadership reshuffle that would see founder Mike Ashley step away from his role as the firm’s top boss.

The parent company of Sports Direct, House of Fraser and Flannels said it is currently proposed that Michael Murray – the retail tycoon’s prospective son-in-law – will become chief executive in May next year.

Retail tycoon Mike Ashley is planning to step down as chief executive of Frasers Group next year (Nick Ansell/PA)

It added that, should Mr Murray take over, Mr Ashley will remain on the board as an executive director.

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The 31-year-old potential replacement, who is engaged to the founder’s daughter Anna, is currently “head of elevation” at Frasers and has been tasked with modernising the business and creating a more upmarket image.

Sports Direct delay results
Sports Direct chief Mike Ashley leaves Sports Direct headquarters in 2019 with Michael Murray (left), who is set to replace him in the top job (Kirsty O’Connor/PA)

Fraser told investors that a pay and bonus deal is currently being drawn up on the basis that Mr Murray will become chief executive.

“The group’s elevation strategy is transforming the business and receiving positive feedback from consumers and our brand partners, especially on projects such as the new Oxford Street Sports Direct which opened in June 2021,” the firm added.

“The board consider it appropriate that Michael leads us forward on this increasingly successful elevation journey.”

Mr Ashley founded Sports Direct in Maidenhead, Berkshire, in 1982 and has now grown his retail empire to be worth around £3 billion and cover almost 1,000 stores.

Frasers also revealed on Thursday that its profits plunged for the past year after sales were hit by enforced high street closures during the pandemic.

The retail giant said pre-tax profits dived by 94.1% to £8.5 million for the year to April 25, compared with £143.5 million in the previous year.

Mr Ashley said: “The group is continuing to invest in its physical and digital elevation strategy and our omni-channel offering is growing in strength.

“Our stores in the UK have reopened above expectations and our online channel continues to significantly outperform pre-Covid-19 periods.

“Nonetheless, management remains of the view that there is a high risk of future Covid-19 pandemic restrictions, likely to be over this Winter and maybe beyond.”