Martin Flanagan: Sports Direct stuck at low altitude
Already we’ve had revelations about the “Victorian” working conditions at its Shirebrook factory in Derbyshire; a mauling from MPs in public session; a hidden listening device when those MPs visited the said factory; an investigation by the Financial Reporting Council into the retailer’s undisclosed commercial relationship with a firm owned by Ashley’s brother and the chief executive quitting.
Even so, Sports Direct was able to somewhat improbably raise the lightning-rod bar yesterday. Interim profits plunged 57 per cent to £71.6 million on the back of the post-Brexit vote slump in the pound for which the group was unhedged; the shares then took a dive.
Group chairman Keith Hellawell also talked darkly of an “extreme political, union and media campaign” waged against Sports Direct that had damaged both customer perceptions and staff morale.
Meanwhile, the company announced that it was buying a corporate plane for £40m. To go with the existing company helicopter. Apparently to do with facilitating operational efficiencies. Ashley warned of tough times for the foreseeable future. The retailer also revealed it had gone family again, entering into an agreement with Double Take Ltd, in which Ashley’s daughter, Matilda, is a director. Sports Direct will take exclusive rights of its cosmetic brand.
Say what you will, and many do, but Sports Direct needs lessons from no-one in securing column inches of media coverage. Unfortunately, it has almost made an art form of getting the wrong sort of column inches, then complaining about it.
More pressure on RBS
No sooner has RBS struck a deal with a large slice of the shareholder groups pursuing legal actions because of alleged flaws in its 2008 rights issue prospectus, than momentum gathers for small businesses seeking compensation from the lender’s controversial former Global Restructuring Group unit (GRG).
The formation of a legal-financial advice joint venture to advise those small businesses who suffered at the hands of GRG ups the ante.