Will Mike Ashley be chewing on an Easter egg this weekend reflecting on whether he should have kept his mouth shut just days earlier?
Sports Direct’s founder stunned industry observers this week when he admitted to a reporter that the retailer is “in trouble”.
As own goals go, it was significant.
It resulted in Sports Direct being forced to put out an embarrassing stock exchange announcement admitting its profits expectations would be at the lower end of forecasts. Its share price also took yet another hit.
Ashley’s attempts at improving Sports Direct’s image have clearly backfired.
So why now for the maverick billionaire to have raised his head above the parapet?
Sports Direct’s reputation is in tatters in the corridors of power – notably Parliament and some national newspaper offices – largely owing to the allegations around its employment practices at its Shirebrook warehouse.
Clearly Ashley had to address the issue, given the fact he has refused to appear before MPs.
But what of the media circus? What effect has that had?
According to exclusive ICM research for Retail Week, consumers are not being deterred by coverage of the retailer’s alleged employment practices.
“Perhaps more worryingly for Ashley is that if its reputation among the majority of punters is relatively in tact, the conclusion that may be drawn is it has a trading problem”
More than half of shoppers (54%) said the negative press had not put them off spending cash at Sports Direct.
So perhaps more worryingly for Ashley is that if its reputation among the majority of punters is relatively in tact, the conclusion that may be drawn is it has a trading problem.
When Sports Direct warned on profits in January, it blamed “unseasonal” weather over Christmas.
However that did not stop rival JD Sports blazing ahead.
City observers may also be a bit perplexed that Ashley revealed the firm was effectively being run by a person who doesn’t even sit on its board, head of retail Karen Byers.
Like Ashley’s football team, Newcastle United, Sports Direct is a giant that has fallen on tough times. Indeed earlier this month the retailer was relegated from the FTSE100.
Usually teams that have hit the buffers change the manger. In the case of Sports Direct, with Ashley as majority shareholder, that can’t be done.
Ashley clearly sees attack as the best form of defence. It’s a strategy that has taken him from humble beginnings to being one of the UK’s most successful retailers.
He may have scored an own goal this time, but only a fool would bet against Ashley in the long-term.