Investors deal blow to Sports Direct at stormy AGM

Independent shareholders hit out at Sports Direct's corporate governance yesterday, with 53 per cent voting against the reappointment of the under-fire chairman Keith Hellawell at a stormy AGM.

Sports Direct founder Mike Ashley empties his pockets of bank notes during a mock search at the firm's headquarters in Derbyshire. Picture: Joe Giddens/PA Wire

However, Sports Direct’s billionaire owner and deputy chairman Mike Ashley lashed out at unions, blaming them for the state of the group and claiming that MPs – who had previously lambasted the treatment of employees at the company’s factory in Shirebrook, Derbyshire – did not understand the complexity of the business.

It came on a day the group’s shares slid 9 per cent to 319.3p after it said in a statement to accompany the AGM and “open day” at Shirebrook that its underlying earnings this year were expected to come in at £300m, down from last year’s £381.4m.

Ashley accused Unite assistant general secretary Steve Turner of “showboating” when challenged over plans to reform working practices.

He said: “This is probably your fault we are in this mess because we can’t talk to you. I made a commitment to make a difference, I am trying, don’t pull me down.

“I accept I have made some errors and I accept I can learn something. Please don’t do the whole showboating thing, it will make me turn away and it’s the people who work in Sports Direct who suffer.”

Turner had enraged the Newcastle United FC owner after suggesting that Ashley should be offering more guaranteed hours to staff.

Ashley also said in regard to his stormy appearance before the House of House of Commons business select committee hearing in June: “One thing I am not allowed to say, but I am going to, is I disagree a little bit with what the MPs said. In 2008ish maybe nine, the web turnover was circa £10 million. In 2016-17, the web turnover is £500m.

“It is incredibly labour-intensive to pick and pack for the web. The facilities built across the road were built for retail. If you are an MP in the House of Commons you can’t possibly understand the scale and the size of this operation.”

At one stage the Sports Direct boss pulled out a wad of fifty pound notes as he emptied his pockets during a mock search on the premises – raising overtones at complaints about searches of employees there.

Institutional shareholders pressed again for fundamental changes at the group, after 21 per cent of shareholders voted for an independent review of the retailer’s working practices.

Euan Stirling, Edinburgh-based Standard Life’s head of stewardship, said responses to its inquiries had been “unconvincing or non-existent”.

Paul Lee, of Aberdeen Asset Management, said he hoped the AGM and vote against Hellawell, had given Sports Direct “the required reality check for change to be implemented”.

Legal & General said the vote showed “it is clear the board needs to enact significant change to earn back shareholder trust”.

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