Mike Ashley famously said last year he wanted Sports Direct to be as good a retailer as department store chain John Lewis.
And yesterday he said he is aiming to the make the company he founded 34 years ago the ”Selfridges of sport”.
But judging by Sports Direct’s current troubles, the maverick billionaire has a big job to do to make that anywhere near a reality.
Sports Direct’s well documented troubles – centred around its treatment of workers and corporate governance – got a very public airing at today’s AGM and ‘open day’.
Ashley tackled his critics by using the same cheeky-chappy approach that charmed MPs. He repeatedly stressed that he was “sorry” for the problems, like the long security queues for warehouse staff.
Blame game
But he tried to blame some of the issues on the vast size of the operations at its Shirebrook warehouse.
“When it gets on this scale, nothing is easy,” he said as he led 100-odd shareholders, journalists and union representatives around the Derbyshire site.
The carefully stage-managed nature of the ‘open day’ meant little had been left to chance
Ashley highlighted that his warehouse workers were now picking 30,000 website orders a day. “It’s very labour intensive,” he said. “You can’t comprehend the size.”
However he insisted that by pointing out the scale, he was not making excuses. “I don’t want the headline ‘excuses’, I want the headline ‘sorry’,” he said, when leading the tour through one of Shirebrook’s canteens.
Inside the notorious facility – reportedly known locally as ‘the gulag’ – it did feel vast, as we were led past rows and rows of picking lines.
A glimpse of the facility did not reveal the problems that have been written about. Nevertheless some of the workers looked pretty weary as they went about their business.
The carefully stage-managed nature of the ‘open day’ meant little had been left to chance.
Flashing the cash
But one moment the Newcastle United owner may wish to forget was when he gave a demo of a security check and proceeded to pull out of wedge of £50 notes, causing merriment among onlookers.
Apparently he had been to the casino.
Another came when the tycoon lost his temper with a representative from Unite. He appeared to blame the union for some of the “mess” the company was in with its worker relations and accused it of “showboating”.
Hellawell suffered the ignominy of having his re-election rejected by independent shareholders
On the whole, however, Sports Direct’s founder may feel he dodged a serious kicking today. The offer of inviting all-comers to his firm’s infamous Shirebrook HQ was a high-risk strategy.
As chairman Keith Hellawell admitted, they had a security team on standby in case things got too out of hand.
Hellawell suffered the ignominy of having his re-election rejected by independent shareholders, but has stayed in place with the backing of Ashley as majority shareholder.
The company had taken the sting out of proceedings by releasing a report yesterday that outlined how it was going to tackle some of its worst problems, such as its reliance on zero-hours contracts and the ’six strikes and your out’ rule.
However this tactic was slightly scuppered by the fact that Sports Direct thought it a good idea to release a profit warning this morning and reveal that Hellawell had offered to resign.
For all the mea culpas that are offered though, the only way that Sports Direct will appease its critics is if there is genuine substance to its promises of reform.
Ashley has asked for time to fix the business.
But with the share price still in the doldrums and the unions and media baying for blood, the clock continues to tick louder than ever.
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