Two of Mike Ashley’s brands face audit problems after payroll data goes missing
Two fast-fashion brands at Mike Ashley’s Fraser Group, I Saw it First and Choice, have been affected by audit issues after their payment data could not be verified.
Auditors Cooper Parry were unable to verify £7m of wages and salary payments at I Saw It First, according to This Is Money.
The fast-fashion brand said it lost some payroll data when switching accounting systems to those used by Frasers Group.
Mike Ashley’s fashion empire acquired the online fast-fashion retailer in July 2022 for £1 in a deal that included the transfer of £13m in debt owed by the retail’s shareholders to Frasers as a loan.
“A limited set of I Saw It First payroll data can no longer be accessed because it was not migrated on to Fraser Group’s systems during the post-acquisition integration process, and the I Saw It First system which it was stored on no longer exists,” a Frasers spokesperson told This is Money.
At Choice, Hart Shaw said that crucial information needed for auditing was missing from the company’s accounts.
At the end of 2022, Mike Ashley bought Choice from JD Sports along with six other fashion brands.
The issues at the two firms have sparked fresh concerns over Fraser Group’s corporate governance standards, which have been under scrutiny.
The Financial Reporting Council previously handed former Sports Direct auditor Grant Thornton a fine of £1.3m after an investigation revealed “serious failings” in Grant Thornton’s audit of the accounts during the 12 months to April 2016.
Frasers, which has historically relied on the acquisition of smaller brands on the brink of collapse to fuel its growth strategy, has become one of the UK’s top retailers under Mike Ashley’s stewardship.
In its latest full-year accounts, it said adjusted profit before tax rose 13.1 per cent to £545m across its many brands.
It has built a large shareholding in JD Williams, Jacamo and Simply Be owner N Brown after first acquiring a 4.5 per cent stake in October 2022. It also has stakes in Boohoo and Hugo Boss.
Correction: The original version of this article referred to “serious failings” in ‘the retailer’s’ accounts in paragraph nine. It has since been updated to ‘Grant Thornton’s audit of the accounts’.