One thing we didn’t get at troubled retailer Sports Direct’s troubled AGM and associated “open day” at its Shirebrook plant yesterday was closure.
Independent institutional investors were not pacified, while pugnacious owner and majority shareholder Mike Ashley took the opportunity to claim the unions were mainly at fault for the state the retailer finds itself in, and that MPs could not be expected to understand the scale and complexity of the business.
If open days, like housewarmings, are meant to spread sweetness and light, this appeared to have something of the air of going to someone’s home to mend fences, and a new row breaking out.
More than half of Sports Direct’s independent investors voted against the reappointment of chairman Keith Hellawell. With Ashley owning 55 per cent of the company, the minority investors can always be voted down, but it is clearly a frosty impasse, not made any easier by the group saying earlier that it had already rejected an offer by Hellawell to resign.
The whole issue is put on hold until next year’s AGM. Hellawell said he will step down at that meeting if he does not have the full backing of shareholders.
You wouldn’t want to stake a Shirebrook shedload of wonga on that outcome. There were some comical moments yesterday when in a bizarre turn Ashley, who is not short of a few bob unlike probably some of his employees, pulled a wad of fifty pound notes out of his pocket during a mock search that his warehouse employees have had to endure for real.
It is going to take a big turnaround for institutions to throw their weight behind existing management and drop their demand for new senior executives to act as a counter-balance to Ashley’s undoubted dominance at Sports Direct.
They want an independent review of working practices, clearly unsatisfied with the company’s own review published on Tuesday that made some concessions in areas such as national minimum wage and alternatives to zero-hour contracts.
Whether Ashley will give in to the more extensive demands or actually walk away at some stage, taking his money and occasionally abrasive personality with him, remains fascinating. But the two-way relationship is clearly a work in progress.