“I begin to question whether this intense scrutiny is all ethically motivated. One of the most damaging consequences has been for the very people our critics supposedly support,” chair Keith Hellawell said in the firm’s interim results report.
The results reveal that pre-tax profits at the firm had fallen 57 per cent to £71.6m for the 26 weeks to 23 October.
Hellawell blamed the campaign for damaging the company’s reputation and negatively impacting the morale of its staff.
However, he also took the opportunity to thank staff members for their loyalty during “such testing times”.
PR Week reports that earlier this year company chief executive Mike Ashley was grilled by MPs on the Business, Innovation and Skills Committee following an undercover Guardian investigation at the Sports Direct warehouse in Derbyshire last December, which uncovered extremely poor working conditions.
In response to Hellawell’s statement, Steffan Williams, partner at Newgate Communications, also chairman of the PRCA, said: “It is great to thank staff members for their loyalty and support, but the leaders of any business must communicate effectively with all of its stakeholders.
“Sports Direct clearly has not succeeded in recent months in doing that. This is a perfect illustration of why an integrated approach to communications – covering all stakeholders – is now essential. It also reflects the reality that communications has moved from being a tactical support function to become a strategic and central one.”
Nick Barron, MD for corporate reputation at Edelman, said the way companies treat their employees has become a defining issue in terms of public trust in business.
“It’s no surprise that this issue is having a material impact. However, the balance of this statement is wrong. Leadership admits some mistakes but quickly moves on to attacking the people who highlighted those mistakes in the first place. An apology can be a powerful thing, but only if it is authentic and if you are able to show that things have changed.”
