We’re in trouble, admits Sports Direct’s Ashley

Mike Ashley

Mr Ashley told The Times he had concerns that the sportswear retailer, which employs about 18,000 people in Britain, was losing momentum and said that he would refuse to appear before a Commons select committee in June.

“We are in trouble, we are not trading very well. We can’t make the same profit we made last year,” the Sports Direct founder said. “We are supposed to be taking the profits up, they are not supposed to be coming down, and the more the media frenzy feeds on it, the more it affects us.”

The billionaire owner of Newcastle United laid the blame for the “media circus” on Ed Miliband, who, during the election last year, accused Sports Direct of Victorian working practices. Mr Ashley claimed that the former Labour leader had cost the staff of Sports Direct £60 million in lost bonus payouts and said that he would like to “box him [Mr Miliband] in the ears”.

Mr Ashley was speaking during a tour of Sports Direct’s giant warehouse complex in Shirebrook, Derbyshire, which is second in size only to the cargo terminal at Heathrow. He opened up the site to MPs — none attented — and selected media to dispel allegations that the site was a “gulag” where staff were mistreated, subjected to lengthy security searches and allegedly paid below the minimum wage.

Mr Ashley added that he personally had overseen a review of working conditions at Shirebrook and that an independent consultant would assess his findings. Sports Direct also has announced that it will pay a living wage of at least £7.40 an hour to staff over 25 years of age.

There has been a steady stream of bad news regarding Sports Direct since before Christmas. It posted lower-than-expected half-year profits and in January issued a profit warning, stating that poor sales meant that its full-year profits could fall as low as £380 million.

Mr Ashley said that the value of its new bonus share payout scheme for staff had halved in the first year as a result of the fall in Sports Direct’s share price, which has plummeted from 805p last summer to 423¾p at the close yesterday. This means that a directly employed cleaner who earned a £48,000 bonus in 2013 is, under the new scheme, likely to receive a bonus of £19,227 in 2017.

“The shares are like wallpaper to me, but for the staff this [the bonus] is life-changing,” Mr Ashley said, adding that he wanted to tell MPs: “You are not helping the people who work at Sports Direct — you are hurting them.”

Mr Ashley said that he was refusing a request from Iain Wright, MP, to attend a business select committee hearing on June 7 because he believed that it was an “abuse of parliamentary process”. He said that politicians needed to visit Shirebrook and “see for themselves” what working conditions were like.

The entrepreneur, who prefers to be “under the radar”, said that he was speaking out to stop the “public vilification” of Sports Direct. “Once you start to spiral a company down, you lose the momentum. We have all seen the effect that negative media can have on companies, and that spiral is growing.

“There is no question it is having an effect [on the business].”