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Sports Direct founder Mike Ashley will become a consultant to Hornby, the seller of Corgi cars, miniature trains and Scalextric racetracks.
The sportswear billionaire has struck an unpaid consultancy agreement with the company after his retail empire Frasers Group built an 8.9 per cent stake in the business.
Ashley, who took a step back from running Frasers in 2022, will be available to support Hornby’s chief executive and advise the wider business on “systems, operations, logistics and, where relevant, broader matters of strategy”, Hornby said in a statement on Wednesday.
The shares initially went up 7 per cent to 38p after Ashley’s involvement was announced, pushing its market capitalisation to almost £65mn, before paring back the gains.
Frasers, which also owns UK department store chain House of Fraser and has smaller stakes in many retail businesses, increased its stake in the toymaker last month.
Nick Bubb, an independent retail analyst, criticised the decision at the time, saying it was part of “nonsense moves” to build stakes in other companies.
Frasers’ finance chief Chris Wootton, however, said the group “has a vision to build the planet’s most admired and compelling brand ecosystem” and that it already sold Hornby’s products through Game, a gaming and entertainment company that it also owns.
Frasers, previously known as Sports Direct, announced this week that it edged up its overall position, including derivatives, in online fashion retailer Asos, to about 26.8 per cent. It also owns chunks of rival Boohoo as well as electronics retailers AO and Currys.
Ashley stepped down as director of Frasers in 2022 after he handed the reins over to his son-in-law Michael Murray, who has been seeking to modernise the group and “elevate” its brands.
Hornby’s boss Olly Raeburn previously said he “looked forward to exploring commercial opportunities [with Frasers] . . . to unlock the full potential of Hornby’s much-loved brands”.
The toy retailer started life in 1901 in Liverpool when founder Frank Hornby received a patent for his Meccano construction toy. It posted revenues of £23.8mn in the six months to September 30 last year, up 6 per cent year on year, and an underlying group loss before tax of £4.2mn.
