Assist in talks to rescue Sports Direct staffing agency Transline

sports direct

A privately owned recruitment group is in advanced talks to stitch together a rescue deal for the controversial staffing agency which supplies workers to Sports Direct’s warehouse in Derbyshire, reports Sky.

Sky News has learnt that Assist Resourcing, a subsidiary of Russell Taylor Group, is close to agreeing a takeover of Transline, which has spent the past three weeks bracing itself for the prospect of administration.

A deal could be struck as soon as next week, a person close to Transline said this weekend.

If the company’s future is salvaged, it would avert a possible threat to thousands of jobs across the UK – a prospect which would inevitably spark a political row with less than a month until the General Election.

Transline manages a temporary workforce estimated by people close to the company at approximately 11,000.

The group has blamed “tighter margins” for its financial difficulties and has told prospective investors that it required new funding of just over £6m.

Sources said that Russell Taylor Group, which acquired Assist earlier this year, was keen to acquire Transline on the basis that Sports Direct remained as a major customer.

Assist’s major clients include JD Sports Fashion, the biggest competitor to Mike Ashley’s Sports Direct.

Transline’s directors filed a notice of intention to appoint Deloitte as administrator last month, which they renewed nine days ago in a bid to provide sufficient breathing space to seal a rescue takeover.

A further renewal is likely next week if the talks with Assist drag on beyond Monday, a Transline source said.

The need for a white knight has become more urgent in recent weeks after a search for external backers, launched in March, failed to produce substantial new financial backing.

Sky News disclosed last week that Transline Group paid more than £1m last year to directors in the form of dividends, loans and a transfer of shares – even as it was facing a funding squeeze after suffering a seven-figure annual loss.

Transline, which has been fiercely criticised over working practices at facilities used by Asos and Mike Ashley’s Sports Direct, lost £1.2m in 2016.

Asos and Amazon have both terminated their working relationships with Transline this year, and other major customers are understood to have been reviewing their options since the parlours state of its finances became clear.

The company declined to comment on Saturday beyond its most recent statement, which said: “We have been involved in a number of negotiations, and are now at an advanced stage with one of the parties we have engaged with,” a company statement said.

“We have a clear timeline to complete the agreement with the party in question within the 10 days.”

Transline was founded in 1989, and was virtually invisible in terms of a public profile until relatively recently.

It has run into a string of reputational problems in the last year, however, particularly in relation to working practices at Sports Direct’s warehouse at Shirebrook in Derbyshire, where a ‘six strikes’ policy left workers fearing for their jobs if they took ‘excessive’ toilet breaks.

That row placed it squarely in MPs’ cross-hairs, with Transline’s finance director questioned at two parliamentary hearings.

A dispute over National Minimum Wage payments led to Transline paying £624,000 to HM Revenue and Customs, according to information sent to potential investors.

Transline’s co-founders – Paul Beasley and Jon Taylor – each own 42.5 per cent of the company, while another executive, Mark Elms, holds 5 per cent, according to City sources.

Its management team is said to have been keen to put together its own buyout deal, although the chances of that succeeding were said to be remote.

The company’s main lender is Barclays.

It was unclear this weekend whether the bank would lose out financially from a takeover of Transline by Assist.

Russell Taylor Group could not be reached for comment.