Mike Ashley is to step down from the board of Sports Direct owner Frasers Group next month, 40 years after founding the retail empire.

The billionaire retail tycoon will step down as a director after the group’s annual shareholder meeting on October 19, although he remains the controlling shareholder and will continue to act as an adviser to the board and senior management.

The former Newcastle United owner had already handed over the reins to new chief executive Michael Murray in May, when he stepped back into an executive director role.

Mr Murray, the founder’s son-in-law, was promoted to the position after leading Frasers’ “elevation strategy” as the firm has sought to grow its premium division.

But Mr Ashley has remained closely involved in the firm’s management and is still the group’s biggest shareholder with a stake of nearly 70%.

He said he remained “100% committed” to backing the group and will stump up £100 million in financing to show his “continuing strong support”, with the cash lent on the same commercial terms as its existing borrowing facilities.

Mr Ashley said: “It is clear that the group has the right leadership and strategy in place and I feel very confident passing the baton to Michael and his team.

“Although I am stepping down from the board, I remain 100% committed to supporting Frasers and Michael’s plans and ambitions, and I look forward to helping the team as and when they require me.

“My commitment and support as a Frasers’ shareholder is as strong as ever.”

Sports Direct store
Mike Ashley launched Sports Direct in 1982 (PA)

Mr Murray added: “Mike has built an incredible business over the past 40 years and, on behalf of the board and the group, I want to thank him for all he has done.

“With our new strategy and leadership team, we are driving this business forward at pace and we are all excited for the future.”

Mr Ashley opened his first sports shop in 1982, which later became Sports Direct before the name was changed to Frasers Group after buying the House of Frasers department store in 2018.

It has since gone on to snap up a raft of retail high street brands, including Game, Evans Cycles, Jack Wills and Flannels.

Frasers rejoined the FTSE 100 Index last month following its exit from the top flight of shares six years ago.

AJ Bell investment director Russ Mould said Mr Ashley’s move to step down was a “seismic moment” for Frasers.

He said: “Ashley has been so synonymous, for both good and bad, with the retail empire which has grown out of the Sports Direct brand that his departure, even if he will remain a major shareholder and adviser to the company, is a big shock.

“He may have divided opinion in the City, but his entrepreneurial skills still helped take the business from a single store in Maidenhead to one of the UK’s largest retailers.

“Without him on the board Frasers may have a bit of an identity crisis.”

“A lot will fall on the shoulders of the current CEO and Ashley’s son-in-law, Michael Murray, which shows that Ashley is literally keeping the leadership of the business he built in the family,” he added.