The $400m Shoe Empire Mike Ashley Wants for a Song (with Scott Middleton, Terem Capital)
This is our monthly deep dive with Scott Middleton, founder of Terem Capital. Terem is a long-term holding company that buys and grows small, profitable, business-to-business technology companies — the kind doing $1–10 million in revenue that founders struggle to sell.
You can watch the full episode on YouTube below, listen wherever you get your podcasts, or read on for a summary.
The subject this month: ASX-listed shoe empire Accent Group (AX1), and the hostile takeover bid circling it.
Sell now or wait three years? Scott brought a real founder dilemma to the table — a business owner who could keep growing but is tempted to cash out. Adir’s answer was emphatic: don’t sell the whole thing, do a secondary. “Try and do a secondary sale of a meaningful amount of non-controlling equity… Take that money off the table, put it in your pocket. And then that will dramatically increase your risk appetite to drive the next seventy percent of your equity hard. That’s what I did. I do it with almost every founder I’m involved with… because I always want them to take more risk.”
Search funds are coming for your dad’s air-con business. The guys nerded out on the US “search fund” model — MBAs raising money to buy an old, boring, profitable business and run it. Adir, channelling the archetype: “I’m a smart person. I’ve done an MBA… I can’t be bothered working my way up in a company and I don’t want to found something new. So just give me cash and bet that I’ll figure out how to run it.” The serious point underneath it: a wall of 70-to-75-year-old founders is about to need an exit, “and the alternative… is shutting it down. That’s plan B. Kill the goodwill.”
The newspaper game. Adir described an experiment where investors are shown old finance front pages and asked to trade on them — and almost everyone does terribly. The AIs do better, “but it tends to overbet on stuff and then blows itself up. Claude did the best, actually, of all the AIs.”
Accent is a third-party retailer trying very hard to become something better
You may not know Accent Group, but you know its brands: The Athlete’s Foot, Hype DC, Platypus, the soon-to-be-shuttered Glue Store — plus the exclusive Australian distribution of Skechers, Hoka, Vans, Doc Martens and Saucony. Revenue has compounded impressively: $440 million in 2016, $800 million by 2020, $1.46 billion last year. The share price, meanwhile, has been a yo-yo — 65c in 2011, $1.80 in 2016, 68c when COVID hit, a four-bagging peak of $2.94 in 2021 (a $1.5 billion company), and back to 55c last month.
Adir’s framing of that disconnect was the line of the night:
Adir: “If all you got to see in this business over the last fifteen years is their revenue and earnings numbers, I think you would never guess that the share price had been this volatile.”
The strategic story is a slow march away from plain wholesale-and-retail toward owning more of the margin — buying Stylerunner out of trouble and growing it, locking up exclusive brand licences. But Adir was clear-eyed about what it still is today:
Adir: “Predominantly they’re still a third-party retailer selling some of their exclusive brands in Australia. They’ve got a little wholesale business and a little vertically integrated business… it’s not Mecca, but of all the third-party retail businesses, this is definitely one of the better ones.”
Functional beats fashion — and that’s the whole thesis
The most useful idea in the episode came out of Scott’s weekend. Sent to a mall on a shoelace mission, he wandered into The Athlete’s Foot and found it heaving while the fashion stores around it sat empty.
Scott: “Everyone’s in there getting their feet measured, trying to get the right boots… there’s a functional technology here for measuring your foot and getting the best possible shoe. That kind of foot traffic thing matters a lot in this retail world.”
Adir had the data point to back it: roughly 83% of Athlete’s Foot shoppers use the in-store measurement tech. That’s the distinction the whole business turns on — functional versus fashion. The functional end (running, fitting, performance) is sticky and repeatable. The fashion end is a knife-edge:
Scott: “The fashion ones are hard to ride, because you’re either riding a trend and doing really well, or you’re on the other side of it and you’re having to write off your stores and shut them down.”
Where it gets genuinely interesting is the cornered resource — Accent’s exclusive Australian rights to the brand of the moment, Hoka. Adam laid out the flywheel: scale and store count earn you the exclusive licence, and the licence is a toll booth.
Adir: “They’ve got a cornered resource for Hoka in Australia. If you want to stock Hoka, one way or another you’re going to be paying them — you’re going to wholesale buy off them, or you’re a customer that retail buys off them.”
The margin collapse nobody can quite explain
Now the bad news, and the reason the stock got smashed. First-half profit fell from $47 million to $28 million, and gross margin collapsed from roughly 57% to 47%. Management offered three reasons — a high-discount environment, forced inventory clearances, and the AUD/USD. None of them landed.
Adam: “High discount environment means your brand’s weak or you haven’t got any pricing… the US dollar wasn’t even super strong last half, so I’m not sure how that’s an excuse. I feel like they’re just chucking darts at the dartboard.”
Adir translated the “discounting” excuse into what it actually means about the economy:
Adir: “You saw the store was full but all these other stores were not very full — that’s called consumer confidence. That’s: we have to run discounts to get people to buy. That is what’s going on in Australia right now.”
On the “we bought the wrong stock” defence, both were unwilling to crucify a CEO with this track record over one bad buying cycle:
Adir: “Every business that has inventory goes through a period of having to clear out the wrong stuff. If I kept seeing it, I’d say maybe this guy’s lost it” — but not on one half.
The honest conclusion: “There’s been a dramatic drop in gross margin and it’s not well explained in the documentation.” That’s the share price.
A cheap stock — if you trust the numbers
So is it a bargain? The market cap fell about $400 million on the downgrade, putting it on roughly six to seven times earnings. Adam’s read: “A business that’s shown over ten years it can deliver growth — that’s a crazy low multiple.” Scott’s defence of the sector was a neat one for 2026:
Scott: “Unlike some of the other things, it doesn’t have that AI risk attached to it. That’s why I love retail. And that’s why I love GLP” — the weight-loss drugs that should, in theory, put more people in running shoes.
Adir rebuilt the maths from the ground up and landed somewhere more sober. Accent guided to $79–84 million of EBIT for FY26, but the EBIT is eaten by interest and then tax:
Adir: “After interest, that eighty could be fifty-five. Then they pay some tax, maybe they get to thirty-five. And they’re valued at four hundred mil. I think this is more like eleven times net profit” — cheap on EBIT, less heroic on the bottom line.
Daniel Agostinelli and the cloud he didn’t make
A word on the CEO. Daniel Agostinelli is a Brett Blundy protégé and Sanity co-founder, the kind of high-quality operator Adir says he looks for — “this is a special guy.” He’s also under an ASIC insider-trading cloud over a share sale made shortly before an announcement. His defence: the chairman signed off on it. The chairman then left three days later. Adam thought the blame was misallocated:
Adam: “The chairman should have said, no, you can’t sell, Daniel. He stupidly goes, of course, do what you want. And now Daniel’s being blamed for it… the fault really should lie on the chairman here.”
Adir was more cautious — and turned it into a governance lesson:
Adir: “There’s a moment in life where something looks less likely and then it looks more likely… that’s why board minutes are so important. And people neglect board minutes so badly.”
Mike Ashley’s takeover chess
Frasers Group — the UK retail giant run by billionaire Mike Ashley, owner of Sports Direct — has lobbed a hostile, zero-premium bid at 65c. But the bid is the endgame of a decade-long campaign. Frasers has wanted into Australia for years (it had earlier dabbled with MySale and bought Sneakerboy out of administration). The Accent operation unfolded as follows:
Buy the founder out at the top. In July 2024, with Accent above $2, Brett Blundy sold his entire ~$165 million block to Frasers. Adam: “I remember seeing Brett sell and thinking, oh, this can’t be good.” Adir on Blundy’s timing: “He’s good, isn’t he? Doesn’t get much wrong” — he sold at the absolute peak.
Put your own man on the board. Frasers nominated an “independent” director — who happened to have run Sports Direct for Ashley for 35 years.
Adir: “You’re Mike Ashley and you’re saying, I’ve locked up 15% of the company, but how the hell am I going to know what’s going on? So I appoint someone on the board who ran a chunk of my Sports Direct business and that I really trust. I think that will really nail the information flow for me.”
Then sign the JV that does the heavy lifting for you. Accent took on the capital-hungry Sports Direct rollout — which Adam argued is exactly what a patient predator wants:
Adam: “You just go spend a couple hundred million on this, and then — boom — I’m going to take you out when you’re a bit weaker.”
The genius, both agreed, is that Ashley cannot lose. If the Sports Direct partnership soars, his stake re-rates. If it stalls, he buys the lot cheaply. Either way Accent grows more dependent on him.
Adir: “This guy has manoeuvred himself into a great situation.”
So what does it take to win it? The stock is already trading above the 65c offer, and Ashley’s blocking stake means he’s the only buyer in town. The guys think it gets done — but not at 65c.
Adir: “If you offer an investor who five seconds ago was sitting at 55c a buck — and by the way, your dividends are being cut anyway — I think you get this away at a dollar. I’m just not sure Mike actually wants to pay a dollar.”
Adam: “You can’t make six billion US dollars unless you’re a pretty good operator. And Mike clearly is.”
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