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Mike Ashley blames unions and MPs for Sports Direct woes

Published 07/09/2016

Sports Direct founder Mike Ashley in the picking warehouse at the firm's headquarters in Shirebrook, Derbyshire
Sports Direct founder Mike Ashley in the picking warehouse at the firm's headquarters in Shirebrook, Derbyshire

Sports Direct boss Mike Ashley has lashed out at unions, blaming them for the retailer's long list of problems and claiming MPs do not understand the scale of the business.

During the firm's annual general meeting and "open day" on Wednesday, the billionaire accused Unite assistant general secretary Steve Turner of "showboating" when challenged over plans to reform working practices.

He said: "This is probably your fault we are in this mess because we can't talk to you. I made a commitment to make a difference, I am trying, don't pull me down.

"I accept I have made some errors and I accept I can learn something. Please don't do the whole showboating thing, it will make me turn away and it's the people who work in Sports Direct who suffer."

Mr Turner had enraged the Newcastle United owner after suggesting that Mr Ashley should be offering more guaranteed hours to staff.

Mr Ashley also hit back at the MPs who put him through the ringer at a House of Commons Business Select Committee hearing in June.

"One thing I am not allowed to say, but I am going to, is I disagree a little bit with what the MPs said. In 2008ish maybe nine, the web turnover was circa £10 million. In 2016/17 wherever we are now the web turnover is £500 million.

"It is incredibly labour intensive to pick and pack for the web. The facilities built across the road were built for retail. If you are an MP in the House of Commons you can't possibly understand the scale and the size of this operation. Even if we did it all again, we would still make mistakes."

However, the tycoon added that he "clearly could have done a better job" at the company.

During a tour of the company's Shirebrook warehouse, Mr Ashley said he did not "knowingly" or "deliberately" run the operation badly, adding that the firm's rapid growth and the sheer scale of the business had made it difficult to get it right.

At one stage Mr Ashley - who has been lambasted for not paying staff the National Minimum Wage, using zero-hour contracts and presiding over "Victorian" working practices - pulled out a wad of fifty pound notes as he emptied his pockets during a mock search.

The AGM vote saw independent shareholders vent their anger at chairman Keith Hellawell, with 53% voting against his reappointment.

Earlier in the day, Mr Hellawell said he will step down at next year's annual general meeting if he does not have the support of shareholders.

It was also revealed that Mr Hellawell, who has faced calls from leading shareholder groups to leave his position, offered his resignation at the weekend. However, the former West Yorkshire Police chief constable said that he would remain in the role after the board unanimously backed him to continue and assist in further improvements.

But neither Mr Hellawell's or Mr Ashley's words did anything to appease Standard Life Investments, the firm's second largest shareholder.

The investment giant confirmed it has voted against the company's executive pay report and against the reappointment of all non-executive directors, in addition to calling for a full and independent review of corporate governance.

Euan Stirling, Standard Life's head of stewardship and environmental, social and governance investment, said responses to its inquiries "have been either unconvincing or non-existent".

To compound matters, shares in Sports Direct took a hammering, plunging more than 9% after the retailer also said earnings are expected to come in at £300 million for the year, down from last year's £381.4 million.

Unite, which counts over 500 Sports Direct workers as members, spearheaded a campaign against what it dubbed "Victorian working practices" at the firm's Shirebrook warehouse in Derbyshire.

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