Sports Direct has offered an olive branch to the City – the first sign that the retailer is willing to play ball as a public company.
Broker Oriel Securities was last week invited to the retailer’s Shirebrook head office for a tour by chief executive Dave Forsey.
Analyst Jonathan Pritchard said: “Everyone has been slinging so much mud at Sports Direct, but what we found was a well put-together business. All the necessary reporting systems are in place and there is no issue with management or day to day logistics.”
Pritchard said Oriel was previously concerned that the relationship between Sports Direct and key suppliers Adidas and Nike was tense, but “found solace” in what he saw.
He said both Nike and Adidas have staff installed at Shirebrook to work with the retailer’s buyers and enjoy an ongoing dialogue.
Pritchard recommended to Sports Direct management that they should offer historic data at trading updates, but said the City needs to show flexibility in how it analyses the retailer’s figures.
“Sports Direct has a different way of getting from A to B and we should make a move towards them and grab the olive branch,” he said.
Pritchard said Sports Direct suffered a “perfect storm” last year with the bad summer weather, England’s failure to qualify for Euro 2008 and poor Christmas trading, but the business would improve.
He added that he hoped the move towards a more open relationship between the retailer and the City was not a false dawn and that directors “don’t retrench back because it is a better business than the market believes”.
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